COMMISSION’S ORDER
ON
TRUE- UP FOR THE FY 2016-17, ANNUAL (MID-YEAR) PERFORMANCE REVIEW FOR THE FY 2017-18, AGGREGATE REVENUE REQUIREMENT OF UHBVNL AND DHBVNL AND DISTRIBUTION & RETAIL SUPPLY TARIFF FOR THE FY 2018-19
CASE No’s: HERC/PRO - 83 of 2017 & HERC/PRO - 85 of 2017
15th November, 2018
HARYANA ELECTRICITY REGULATORY COMMISSION BAYS 33-36, SECTOR - 4, PANCHKULA - 134 112, HARYANA
www.herc.nic.in
IN THE MATTER OF
Petition for True-up of the ARR for the FY 2016-17, Annual (Mid-Year) Performance Review for the FY 2017-18 and determination of ARR and Distribution and Retail supply tariff for the FY 2018-19 for Uttar Haryana Bijli Vitaran Nigam Limited (UHBVNL) and Dakshin Haryana Bijli Vitaran Nigam Limited (DHBVNL), under the provisions of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012, read with section 45, 46, 47, 61, 62, 64 & 86 of the Electricity Act, 2003 – Petitioners : UHBVNL & DHBVNL
AND IN THE MATTER OF
1. Application for seeking Clarification and Removal of ambiguity in application, charge and levy of Minimum Monthly Charges (MMC) for a Domestic Supply Category Consumer as per Distribution and Retail Supply Tariff issued by the Commission. (PRO-3 of 2018) – Petitioner : Shri Pankaj Bhalotia 2. Sales Circular Number D-46/2017 dated 20/11/2017 issued by DHBVN and Sales Circular Number U-46/2017 dated 15/11/2017 issued by UHBVNL for levy and recovery of FSA - Instructions to DHBVN and UHBVN to withdraw both the said sales circulars because of their non-compliance of Regulation 66 of the HERC (Terms & Conditions for determination of tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework), Regulations 2012 and also because of their non-compliance of Commission’s Order and direction given in case number HERC/PRO-33 of 2015 and 35 of 2015 under the provisions of the sections 142 and 146 of the Electricity Act 2003 for levy and recovery of FSA.(PRO-5 of 2018). – Petitioner : Shri Pankaj Bhalotia 3. Petition for review of Tariff Order dated 11.07.2017 passed by the Commission in the case nos. HERC/PRO-39 of 2016 & HERC/PRO-40 of 2016 in the matter of ‘true- up for the FY 2015-16, Annual (mid-year) Performance Review for the FY 2016-17, Revised Aggregate Revenue Requirement of UHBVNL & DHBVNL & distribution & retail supply tariff for the FY 2017-18’. (RA-4 of 2017) – Petitioner: Delhi Metro Rail Corporation (DMRC)
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4. Petition for Concessional tariff to HT Industrial Consumers for power drawn by them during off-peak hours in excess of their normal consumption during the corresponding billing period in the preceding year from October 2017 to March 2018.(PRO-65 of 2017) – Petitioner : UHBVNL
5. Petition for extending rebate of maximum 15% on the normal energy charges to all categories of consumers in the Panipat Smart City area of consumption of energy during off-peak hours. (PRO-17 of 2018). - Petitioner : UHBVNL
6. Petition for approval of Additional Surcharge to be levied upon Open Access Consumers of DISCOMs under Section 42 of the Electricity Act, 2003 read with Regulation 22 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Grant of Connectivity and Open Access for Intra-State Transmission and Distribution System) Regulations, 2012 (HERC/PRO-56 of 2017). - Petitioner : UHBVNL
7. Petition under section 42 of the Electricity Act 2003 read with Regulations 22 of Haryana Electricity Regulatory Commission (Terms and conditions for grant of connectivity and open access for intra-State transmission and distribution system) Regulations, 2012 for approval of Additional Surcharge to the Discoms – UHBVN and DHBVN in reference to the Open Access for Second half of FY 2017-18 (HERC/PRO-29 of 2018). - Petitioner : UHBVNL
QUORUM Shri Jagjeet Singh, Chairman
ORDER The Haryana Electricity Regulatory Commission (hereinafter referred to as ‘the Commission’ or HERC), in exercise of the powers vested in it under section 62 of the Electricity Act, 2003 read with section 11 of the Haryana Electricity Reforms Act, 1997 and all other enabling provisions in this behalf, passes this Order determining the Truing-up of the ARR for the FY 2016-17, Annual (Mid-year) Performance Review for the FY 2017-18, Aggregate Revenue Requirements and distribution and retail supply tariff of UHBVNL and DHBVNL for their Distribution and Retail Supply Business under MYT framework for the FY 2018-19 in accordance with the provisions of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation Transmission, Wheeling and Distribution & Retail Supply under Multi Year
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Tariff Framework) Regulations, 2012 (hereinafter referred to as MYT Regulations,2012. The validity of the said Regulations was extended to cover the period up to the FY 2017-18. This issue was raised in the hearing held in the present case by the petitioner including the need to further extend the control period by a year or so as they have also filed the instant petition accordingly. Since the MYT Regulations for the next control period is still not finalized, the Commission has considered it appropriate to deal with the present petition under the aegis of the MYT Regulations, 2012 including the first amendment brought into affect vide HERC Order dated 07.11.2016 read with second amendment order dated 15.10.2018. Appropriate adjustments, to meet with the ends of justice for all stakeholders including the petitioner, have been made wherever required. The Commission, while passing this Order, has considered the Petition(s) filed by UHBVNL and DHBVNL along with subsequent filings/additional data provided by them including filings made by the two Utilities in response to the various queries of the Commission, objections received from various organisations and individuals and the reply / comments furnished by UHBVNL/DHBVNL thereto to as well as the suggestions of the SAC Members in the meeting held on 30.10.2018. All other relevant facts, data and information available on record of the Commission have been perused before passing this Order.
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CONTENTS
CHAPTER 1 ...... 8
INTRODUCTION ...... 8
1.1 BACKGROUND ...... 8
1.2 PETITIONS(S) FILED BY UHBVNL AND DHBVNL (DISCOMS) ...... 9
CHAPTER 2 ...... 12
PROCEDURAL ASPECTS OF THE ARR PETITION(S) ...... 12
2.1 ARR PETITIONS FILED BY UHBVNL & DHBVNL ...... 12
2.2 SUMMARY OF THE PETITIONS FILED BY THE DISCOMS ...... 12 2.2.1 ARR of UHBVNL ...... 12 2.2.2 Proposed ARR (UHBVNL) ...... 24 2.2.3 ARR of DHBVNL ...... 26
2.3 PUBLIC PROCEEDINGS ...... 30 2.3.1 Objections from Stakeholders and Discoms Reply thereto ...... 32 2.3.2 Objections filed by Sh. Sampat Singh ...... 32 2.3.3 Objections filed by Jindal Stainless Steel through Sh. R. K. Jain ...... 74 2.3.4 Objections filed by Sh. Pankaj Bhalotia ...... 100 2.3.5 Objections filed by Behalf of ACME CLEANTECH SOLUTIONS PRIVATE LIMITED ...... 119 2.3.6 Objections filed by Behalf of Haryana Strips Pvt. Limited ...... 128 2.3.7 Objections filed by M/s. Delhi Metro Rail Corporation ...... 135
2.4 STATE ADVISORY COMMITTEE (SAC) ...... 146
2.5 SUPPLEMENTARY SUBMISSIONS OF DISCOMS ...... 151
CHAPTER 3 ...... 154
ANALYSIS OF ARR FILINGS AND COMMISSION’S ORDER ...... 154
3.1 TRUE-UP OF THE ARR FOR THE FY 2016-17 ...... 154 3.1.1 O&M Expenses ...... 155 3.1.2 Terminal benefits ...... 158 3.1.3 Depreciation ...... 159 3.1.4 Interest on Consumers Security Deposit ...... 160 3.1.5 Interest on Capex loans ...... 160 3.1.6 Interest on Working Capital loan ...... 161 3.1.7 Interest on UDAY Bonds ...... 162 3.1.8 Cost of raising Finance and Bank Charges ...... 164 3.1.9 Other Debits ...... 164 3.1.10 Return on Equity (RoE) ...... 165
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3.1.11 Non-tariff Income ...... 165 3.1.12 True-up of Power Purchase Cost ...... 166 3.1.13 Revenue from Sale of Power for the FY 2016-17 ...... 168 3.1.14 Revised ARR for the FY 2016-17 ...... 168 3.1.15 True-up of RE Subsidy for the FY 2016-17 ...... 170 3.1.16 Fuel Surcharge Adjustment ...... 170
3.2 ARR DETERMINATION FOR THE FY 2018-19 ...... 171 3.2.1 Agriculture Tube Well Sales for the FY 2016-17, FY 2017-18 (revised) & FY 2018-19 (projected) .... 171 3.2.2 True up of AP Sales for FY 2016-17 (True-up of RE Subsidy) ...... 172 3.2.3 AP Sales Estimation for the FY 2017-18 & FY 2018-19 ...... 173 3.2.4 Sales Estimation (Metered other than AP Tube-well) ...... 176 3.2.5 Power Purchase volume ...... 177 3.2.5.1 Projections by UHBVNL / DHBVNL...... 177 3.2.5.2 Commission’s Estimate of Power Purchase Quantum ...... 177 3.2.6 Total Approved Power Purchase Quantum ...... 183 3.2.7 Power Purchase Cost ...... 183 3.2.8 Transmission Losses ...... 187 3.2.9 Interstate Transmission Charges ...... 188 3.2.10 Inter-State sale of Power and Power purchase cost for Distribution licensees ...... 188 3.2.11 Renewable Purchase Obligation (RPO) ...... 190 3.2.12 Intrastate Transmission Charges & SLDC Charges ...... 194 3.2.13 Employee Cost / A&G Expenses...... 195 3.2.14 A & G Expenses ...... 197 3.2.15 Repair & Maintenance ...... 197 3.2.16 Terminal Benefits ...... 198 3.2.17 O & M Expenses ...... 198 3.2.18 Depreciation ...... 198 3.2.19 Interest on Term Loan ...... 200 3.2.20 Interest on Consumers’ Security Deposit ...... 200 3.2.21 Interest on Working Capital ...... 200 3.2.22 Interest on UDAY Bonds ...... 201 3.2.23 Total Expenditure ...... 202 3.2.24 Non-Tariff Income ...... 202 3.2.26 ARR of UHBVNL & DHBVNL for the FY 2018-19 ...... 202 3.2.27 Revenue Requirement for the FY 2018-19 ...... 204
3.3 CAPITAL EXPENDITURE ...... 204 3.3.1 True-up of Capital Expenditure for the FY 2016-17 ...... 204 a) UHBVNL ...... 204 b) DHBVNL ...... 207
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3.3.2 Review of Capital Investment Plan for FY 2017-18 ...... 209 a) UHBVNL ...... 210 b) DHBVNL ...... 212 3.3.3 Capital investment plan for FY 2018-19...... 214 a) UHBVNL ...... 214 b) DHBVNL ...... 216
3.4 REVIEW OF TECHNICAL PARAMETERS ...... 219 3.5 Distribution Losses ...... 220 3.6 Loss Reduction trajectory ...... 223 3.7 Distribution Transformers (DTs) failure rate ...... 226 3.8 Non replacement of defective energy meters by the distribution licensees ...... 229 3.9 Non-replacement of Electro-mechanical meters ...... 232 3.10 Procurement of single phase and three phase LT meters...... 234 3.11 Pending electricity connection/load ...... 235
CHAPTER 4 ...... 238
DISTRIBUTION AND RETAIL SUPPLY TARIFF DETERMINATION FOR THE FY 2018-19 ...... 238
4.1 TARIFF PROPOSAL FILED BY THE UHBVNL & DHBVNL (DISCOMS) ...... 238
4.2 COST OF SERVICE (COS) ...... 238
4.3 METHOD TO ADDRESS THE PROJECTED REVENUE SURPLUS/ (GAP) ...... 238
4.4 AGRICULTURE PUMP SET SUPPLY (AP SUPPLY) ...... 246
CHAPTER 5 ...... 249
WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE ...... 249
5.1 WHEELING CHARGES FOR THE FY 2018-19 ...... 249
5.2 CROSS-SUBSIDY SURCHARGE (CSS) ...... 249
CHAPTER 6 ...... 256
ADDITIONAL SURCHARGE ...... 256
6.1 SUMMARY OF THE PETITION ...... 256
6.2 PUBLIC HEARING ...... 262
6.3 COMMISSION’S ANALYSIS & ORDER ...... 285
CHAPTER 7 ...... 287
TIME OF USE TARIFF / TIME OF DAY (TOD) OPTIONAL ...... 287
CHAPTER 8 ...... 299
DIRECTIVES ...... 299
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Chapter 1
INTRODUCTION 1.1 Background
The Commission, on 5th December 2012, had notified the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012. Regulation 4.2 of the MYT Regulations, 2012 provides that “the Commission shall adopt Multi Year Tariff (MYT) framework for determination of ARR / tariff for each year of the Control Period from FY 2014-15. However, there shall be annual determination of ARR/tariff for the utilities for FY 2013-14 for their respective businesses as per these regulations.” Accordingly, the first Order of the Commission under the provisions of the MYT Regulations was issued on 29th May 2014. In the said Order, the Commission had determined ARR of UHBVNL and DHBVNL for the FY 2014-15, FY 2015-16 and FY 2016-17 and distribution and retail supply tariff for the FY 2014-15.
The Commission by its Order dated 07.11.2016 has amended the MYT Regulations, 2012 by way of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 (1st Amendment) Regulations, 2016. Accordingly, following amendments were made in the Regulation no. 3.16:
“The definition and interpretation under Regulation 3 (3.16) shall be replaced by the following paragraph, namely:-
“Control Period” means a multi-year tariff period fixed by the Commission from time to time. The first control period shall be from 1st April 2014 to 31st March 2018. Provided that where certain norms / benchmarks are required to be computed using ‘baseline values’ and the ‘base year’ has been defined as the financial year immediately preceding the first year of the control period. In all such cases the ‘base year, for projecting normative values for annual determination of the ARR/Tariff petition(s) for the FY 2017-18 shall be the FY 2015-16 based on the respective audited accounts of the licensees and the generating company.
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Provided that in the case of HVPNL/Discoms the O&M expenses for the FY 2017-18 shall be based on the audited accounts for the FY 2015-16 subject to prudence check. Provided further that in the case of HPGCL, the per MW O&M expenses, shall be worked out by the Commission based on the audited accounts for the FY 2015-16 subject to prudence check. “ The validity of the said Regulations was extended to cover the period up to the FY 2017-18. This issue was raised in the hearing held in the present case by the petitioner including the need to further extend the control period by a year or so as they have also filed the instant petition accordingly. Since the MYT Regulations for the next control period is still not finalized, the Commission has considered it appropriate to deal with the present petition under the aegis of the MYT Regulations, 2012 including the first amendment brought into affect vide HERC Order dated 07.11.2016 read with second amendment order dated 15.10.2018. Appropriate adjustments, to meet with the ends of justice for all stakeholders including the petitioner, have been made wherever required.
Accordingly, in the present Order, the Commission has carried out True-up for the FY 2016-17. The approved trued-up amount has been included in the ARR for the FY 2018-19. Additionally, the Commission, in accordance with the MYT Regulations, 2012, has also carried out Annual (Mid–Year) Performance Review of the Distribution and Retail Supply businesses of the two Distribution Licensees i.e. Uttar Haryana Bijli Vitran Nigam (UHBVNL) and Dakshin Haryana Bijli Vitran Nigam (DHBVNL).
1.2 Petitions(s) filed by UHBVNL and DHBVNL (Discoms)
The MYT Regulations, 2012, as amended from time to time, provides that the first control period for determination of ARR/Tariff under MYT framework shall be from 1st April 2014 to 31st March 2020. The regulations 4.4 to 4.8 of the MYT Regulations, 2012 are reproduced below:-
4.4 Tariff during the control period: The Commission shall determine the ARR for each year of the control period and tariff for the first year of the control period separately for Generation Company (ies), transmission licensee(s) and distribution licensee(s). 4.5 The tariff applicable to each business in each of the remaining years of the control period shall be notified by the Commission through a separate order after taking into consideration the following:- a) Mid-year performance review; b) Specified performance targets;
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c) True-up of uncontrollable items as defined in regulation 8.3.
4.6 There will be no True-up of the controllable items except on account of Force Majeure events or on account of variations attributable to uncontrollable items. The variations in the controllable items, as defined in regulation 8.3, over and above the norms specified will be governed by incentive and penalty framework specified in these regulations. 4.7 The tariff determined by the Commission and the directions given in the MYT order shall be the quid pro quo and mutually inclusive. The tariff determined shall, within the time period specified in the order, be subject to the compliance of the directions by the generating company and the licensees to the satisfaction of the Commission. Non-compliance of the directions shall lead to such amendment, revocation, variations and alterations in the tariff, as may be ordered by the Commission. Further non-compliance of directions given in the tariff order may also lead to invocation of the provisions of section 142 of the Act.
4.8 The tariff determined by the Commission shall continue to operate till it is modified or revised by the Commission.
The regulation 71.9 of the MYT Regulations, 2012 provides as under:-
71.9 Filing for Mid-year performance review, True-up and determination of tariff for ensuing year The generating company and the licensees shall file their application for mid-year performance review of the current year, True-up of the previous year and tariff for the ensuing year along with requisite fee by 30th November of each year of the control period as per the details mentioned in the regulation 11 & 13 for the Commission’s review, True-up of uncontrollable / controllable items in accordance with regulation 8.3 and approval of tariff for the ensuing year. In compliance to the above DHBVNL and UHBVNL had filed the Petitions no. PRO 83 of 2017 and PRO-85 of 2017 for APR of 2017-18, ARR for FY 2018-19 and True-up of ARR for FY 2016-17.
Further, as per past practice, the Commission has considered it appropriate to issue a single Order in respect of the present Petitions of UHBVNL and DHBVNL under consideration of the Commission. Accordingly, in the present Order, the common issues of the two Discoms have been dealt with together while the issues specific to UHBVNL and DHBVNL has been dealt with separately.
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In the instant Order the Commission has carried out True-up of ARR(s) for the FY 2016-17, Annual (Mid-Year) review for the FY 2017-18 and has determined the ARR(s) for the FY 2018-19 of UHBVNL and DHBVNL for their Distribution and Retail Supply Business.
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Chapter 2
PROCEDURAL ASPECTS OF THE ARR PETITION(S) 2.1 ARR Petitions filed by UHBVNL & DHBVNL
UHBVNL filed its True-up/ APR/ARR/ Petition (HERC/PRO-85 of 2017) for the FY 2018-19 for its Distribution and Retail Supply business in the Commission vide Memo No. Ch-10/SE/RA/N/F-25/Vol.-69 dated 30.11.2017.
DHBVNL filed its True-up/APR/ARR/ Petition (HERC/PRO-83 of 2017) for the FY 2018-19 for its Distribution and Retail Supply business in the Commission vide Memo No. Ch-11/SE/RA-606 dated 30.11.2017.
The Petitions filed by UHBVNL and DHBVNL were scrutinised and preliminary observations of the Commission were communicated to the licensees vide Memo No. 4206-4207/ HERC/ Tariff dated 19.03.2018. Replies in respect of various observations and deficiencies in the ARR petitions communicated to the Discoms were furnished by UHBVNL vide memo No. Ch-18/SE/RA/N/F-25/Vol(70) dated 27.07.2018. The Commission reviewed the replies submitted by the Discoms and sought further information including non-compliance of some of the observations / directives of the Commission.
2.2 Summary of the Petitions filed by the Discoms
2.2.1 ARR of UHBVNL The Petitioner has prayed to continue with the current levels of tariff and FSA based on which the total gap after True-up for FY 2016-17 comes at Rs.2,240.15 Cr; after re-assessment of ARR, gap for FY 2017-18 comes out to be Rs. 2,400.59 Cr and for FY 2018-19 at Rs.1,706.52 Cr respectively. The resultant gap after continuation of current levels of tariff is proposed to be met through the OFR as proposed under UDAY.
Capital Expenditure (Capex)
The Petitioner has submitted that the Commission had approved its proposal in respect of capex plan of Rs. 1055.97 Cr for the FY 2016-17. The capital expenditure as per the audited accounts of UHBVN for the FY 2016-17 is Rs. 371.71 Cr. The Commission vide order dated 11th July, 2017 has approved a Capex Plan of Rs 800 Cr. for FY 2017-18. UHBVN has estimated to undertake an expenditure of
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Rs 800 Cr. as approved by the Commission in FY 2017-18. In order to achieve the loss targets as proposed in the following chapters, UHBVN proposed to incur a Capital Expenditure of Rs 1484.35 Cr. in the FY 2018-19.
Assessment of Energy Sales for the FY 2017-18 and the FY 2018-19
UHBVNL has submitted that the consumer category wise sales for the FY 2017-18 and FY 2018-19 have been arrived by based on CAGR for the previous year’s data of sales. Agricultural consumption for the FY 2017-18 and FY 2018-19 has been calculated by assuming a growth rate of 5% in sales over FY 2015-16, in line with the methodology adopted by the Commission. Sales to the railways has been assumed to decrease by 35% in FY 2017-18 as railways has opted for open access from 1st October, 2017 and 70% in FY 2018-19. The petitioner has reiterated that the sales projections for FY 2017-18 and FY 2018-19 are based on previous sales growth trend and has been arrived after nullifying the effect of energy sales to jind circle from the energy sales of the previous year. Accordingly, energy sales for the FY 2017-18 and the FY 2018-19 have been projected as 14,640.30 MUs and 15,297.95 MUs respectively.
Energy Balance and Power Purchase for Haryana for FY 2017-18 and FY 2018- 19
The Petitioner has submitted that Month Wise Energy availability for the FY 2017-18 and 2018-19 at the state periphery in MUs has been projected based on the allocated share to Haryana of Central Generating Stations, State Generation and Independent Power Producers and other Stations. The energy availability in Haryana is calculated based on the average PLF of FY 2016-17, FY 2015-16 and FY 2014- 15, share capacity of Haryana from Central Generating Station IPP and various other sources. The energy availability to UHBVN is calculated by multiplying the total availability with the ratio of drawal of UHBVN and DHBVN.
The monthly energy sale is determined by distributing the yearly energy sales in the percentage of month wise consumption of FY 2016-17. The energy sales hereby projected has been grossed up with the losses approved under UDAY scheme to reach at the normative energy required at the Discom periphery and then by the intrastate transmission losses to arrive at the normative energy required at the State Periphery.
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The Normative energy required at the State periphery is then assumed to be met through energy available from Must Run Plant i.e. plants which cannot be backed down like Hydro Power Plants, Solar Power Plant and Biomass etc. The remaining demand is met through thermal Power Plant i.e. HPGCL, IPPs and NTPC as per Merit order dispatch based upon the Variable charges as per the actual bills of FY 2017-18.
The Impact of Interstate losses on the Inter State Generating station has already been taken while calculating the availability at the state periphery. The backing down of the unit is assumed to be limited to the backing down capacity and any surplus created on account of same is assumed to be banked with other states and consumed during next financial year.
The actual Variable Charges of first six months of FY 2017-18 has been multiplied with the estimated energy scheduled for the FY 2017-18. For calculating the Variable Cost of power purchase for the FY 2018-19, the plant wise per unit cost of Power Purchase of FY 2017-18 has been escalated at an average rate of 5% and multiplied with the total estimated energy drawn from various generators as per the Merit Order dispatch to arrive at the total variable cost of power generation for FY 2018-19.
Similarly, the fixed charges paid to the generators in FY 2016-17 are escalated at an average rate of 5% to arrive at the fixed charges to be paid for FY 2017-18 and FY 2018-19.
Further, the Hon’ble CERC through its various judgements has allowed certain generators like Adani Power, and CGPL recoveries on account of change in law etc. It is submitted that Licensee has already made payment of Rs. 1508.14 Cr, therefore the same has been included in the power purchase cost of FY 2017-18. Further, the monthly impact based on the bills of Adani Power on account of above works out to Rs 0.13 per unit. Accordingly the licensee has increased the per unit cost of power purchase for the purpose of estimation of cost of power purchase from Adani Power in FY 2017-18 and FY 2018-19.
The additional power purchase cost due to the impact of Hon’ble CERC Judgment works out to Rs 657.69 Cr for UHBVN and Rs 850 .45 Cr for DHBVN respectively which has been added in the overall projected power purchase cost in
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FY 2017-18. The petitioner has additionally prayed that in case of any variance in the cost of new plants, the petitioner should be allowed to recover the additional cost.
Further, the Nigam has projected the Interstate and Intrastate Transmission charges for FY 2018-19 by escalating the Interstate and Interstate Transmission charges approved by the Commission during the FY 2017-18 by 5% which is rate of escalation considered by CERC for escalating the transmission charges.
The total power purchase cost from external and state sources for UHBVN including impact of CERC Judgment has been assessed at Rs. 10702.89 Crores for FY 2017-18 and Rs. 10,643.03 Crores for 2018-19.
Energy balance for Haryana for FY 2017-18 and FY 2018-19 as proposed by UHBVNL is as under:-
Energy Balance for Haryana for the FY 2017-18 and FY 2018-19 Energy Balance Units FY 2017-18 FY 2018-19 Power Purchase at State Periphery MU 22,394.00 22637.79 Energy Sales to the Consumers MU 14640.30 15297.95 Distribution loss %age 24.00% 20.00% Energy Sales at Discom Periphery MU 19263.56 19122.44 Intra- State Transmission Loss %age 2.46% 2.46% Energy Sales at State Periphery MU 19749.39 19604.72 Surplus MU 2644.61 3033.07
The Nigam has assumed that the surplus power available will be sold entirely as ‘inter-state sales’ throughout FY 2017-18 and FY 2018-19 at 80% of average variable power purchase cost. The Petitioner also submitted the bulk supply tariff as given under:-
Bulk Supply Tariff Units FY 2017-18 FY 2018-19 Net energy available at state boundary for use in UHBVN Mus 22,394.00 22,637.79 Intra-state transmission losses % 2.46% 2.46% Intra-state transmission losses Mus 550.89 556.89 Energy available for sale to distribution licensee at its periphery Mus 21,843.11 22,080.90 Power purchase cost Rs Cr 8,664.51 9,193.30 Inter-state transmission charges Rs Cr 611.24 641.80 Intra-state transmission charges Rs Cr 769.46 807.93 Prior Period Expense Rs Cr 657.69 - Total bulk purchase and transmission charges Rs Cr 10,702.89 10,643.03 Power purchase per unit Rs/KWh 3.97 4.16 Inter-state transmission charges Rs/ KWh 0.28 0.29 Intra-state transmission charges Rs/ KWh 0.35 0.37 Prior Period Expense Rs/ KWh 0.30 -
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Bulk Supply Tariff Units FY 2017-18 FY 2018-19 Average BST for UHBVN Rs/ KWh 4.90 4.82
Transmission Losses
It has been submitted that the inter-state transmission losses and intra-state transmission losses for the FY 2017-18 and FY 2018-19 have been considered as 3.82% and 2.46% respectively as approved by the Commission.
Distribution Losses
The Petitioner for the FY 2017-18 and 2018-19, the distribution losses of UHBVN have been considered as 24.00% and 20.00% respectively as approved under the UDAY scheme, notified by the Government of Haryana.
Interest and Finance Charges
UHBVNL has estimated interest and finance charges (inclusive of repayment of working capital loans and interest on consumer security deposit), net of capitalisation, at Rs.1173.14 Crore and Rs. 1128.14 Crore for the FY 2017-18 and the FY 2018-19 respectively.
Net Interest & Finance Charges (Rs. In Cr) Sr. no Particulars FY 2017-18 FY 2018-19 1 Interest on UDAY bonds payable to the State Government 628.90 377.02 2 Interest on remaining loans 3 Interest on WC loans including CC/OD limits 457.79 589.07 4 Interest on CAPEX loans 115.39 151.62 5 Interest Cost on Consumer Security Deposit 75.68 85.24 6 Guarantee Fees 2.60 - 7 Interest Cost of Jind Loans (107.23) (74.81) 8 Net Interest 1,173.14 1,128.14
As per Regulation 21 of HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012; Interest on Loan Capital for existing loans shall be computed loan-wise and for new loans it shall be equal to the base rate of SBI as applicable on 1st April of the relevant financial year. The relevant regulations are provided here for ease of reference:
“Regulation 21.1 Existing Loans (i) Interest on loan capital shall be computed loan-wise for existing loans arrived in a manner specified in Regulation 19 and shall be as per the rates approved by the Commission.
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(ii) The loan out standing a son 1st April of each financial year shall be worked out as the gross loan in accordance with regulation 19 by deducting the cumulative repayment as admitted by the Commission upto 31st March of previous financial year from the gross normative loan;
(iii) The rate of interest shall be the weighted average rate of interest on institution alloans calculated on the basis of the actual loan port foliates the beginning of each year applicable to the project. In case the weighted average rate is not available, he interest rate approved by the Commission in its earlier tariff order shall be allowed. Provided that if there is no actual loan for a particular year but normative loan is still outstanding, the last available weighted average rate of interest shall be considered. Provided further that if the generating plant/project does not have actual loan, then the weighted average rate of interest of the generating company/licensee as a whole shall be considered;
(iv) The interest on loan shall be calculated on the norm active average loan of the year by applying the weighted average rate of interest;
(v) The generating company and the licensee shall from time to time review their capital structure i.e. debt and equity and make every effort to restructure the loan portfolio as long as it results in net saving son interest. The costs associated with such re-financing shall be borne by the beneficiaries and the net savings (after deducting the cost of re-financing) shall be subjected to incentive/penalty frame work as mentioned in the regulation 12 which shall be dealt with at the time of mid-year performance review/true-up;
(vi) The changes to the loan terms and conditions shall be reflected from the date of such re- financing and benefit passed on to the beneficiaries;
(vii) In case of any dispute relating to re-financing of loan, any of the parties may approach the Commission with proper application along with all the relevant details. During the pendency of any dispute, the beneficiaries shall not withhold any payment on account of orders issued by the Commission;
(viii) In case any moratorium period on repayment of loan is availed of by the generating company or the licensee, depreciation provided for in the tariff during the years of moratorium shall be treated as repayment during those years and interest on loan capital shall be calculated accordingly. Regulation 21.2 New Loans (on or after 6th April 2013) (i) Rate of interest on new loans shall be equal to the base rate of SBI as applicable on 1st April of the relevant financial year plus an appropriate margin that realistically reflects the rate at which generating company or the licensee can raise loans from the market. They shall however, be required to submit due justification to the Commission for the terms and conditions of the loans raised by them. Provided that interest and finance charges on works in progress shall be excluded and shall be considered as part of the capital cost;
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Provided further that neither penal interest nor overdue interest shall be allowed for computation of Tariff. (ii) Any variation above or below the allowed interest rate shall be subject to the incentive and penalty framework specified in regulation 12. (iii) The amount of loan shall be arrived in the manner as specified in regulation 19 and shall be based on the approved capital investment plan. (iv) In case any moratorium period on repayment of loan is availed of by the generating company or the licensee, depreciation provided for in the tariff during the years of moratorium shall be treated as repayment during those years and interest on loan capital shall be calculated accordingly.” Interest on Capex Loan to be raised for the ensuing control period
The Petitioner has further submitted that 78% of the CAPEX i.e. Approved CAPEX Rs 800 Cr. for FY 2017-18 and Rs 1484.35 Cr for FY 2018-19 would be made through loans from various Lending agencies. It is estimated that the fresh Loans would be serviced at the rate of 10.75% per year.
Interest on Consumer Security Deposit
The petitioner submits that Interest on Security Deposit amount has been claimed as per the provision of MYT Regulations, 2012 i.e. payable @ 6.50% (per annum on average opening and closing balance.
Para 21.4 of MYT Tariff Regulations, dated 26/12/2012, provides as under: “Interest shall be allowed on the amount held as security deposit held in cash from Transmission System Users, Distribution System Users and Retail consumers, at the Bank Rate as on 1st April of the financial year in which the petition is filed provided it is payable by the transmission/distribution licensee.” UHBVNL has submitted that the following details of Interest on the Consumer Security Deposit:- Particulars FY 2016-17 FY 2017-18 FY 2018-19 Actuals (Projections) (Projections) Opening balance 955.91 1,092.58 1,236.07 Receipt during the year 136.66 143.50 150.72 Closing balance 1,092.58 1,236.07 1,386.79 Average 1,024.24 1,164.32 1,311.43 Interest rate 7.00% 6.50% 6.50% Interest on CSD 71.71 75.68 85.24 Interest Capitalized
It is based on proportion of 60% of the asset capitalized over the opening CWIP and capex added during the year;
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Interest on Working Capital Loan
It is also pertinent to mention that the Government of India has notified Ujwal Discom Assurance Yojana (UDAY) scheme for operational and financial turnaround of power distribution companies (DISCOMs), on 20thNov 2015 under which State shall take over 75% of Discom debt as on 30thSeptember, 2015 over two years – 50% of Discom debt shall be taken over in FY 2015-16 and 25% in FY 2016-17. The implementation of UDAY leads to changes in the projections of interest and finance charges for the Discoms which had an impact on the revenue requirement of the Discoms.
It is submitted that the first tranche of UDAY bonds against 50% of the debt as on 3.9.2015 amounting to Rs. 17300 Cr has been issued, after the finalization of the loans to be taken over under this tranche and the terms and conditions of the UDAY bonds. Now the second tranche has also been taken over towards 25% of the debt amounting to Rs. 8650 Cr.
The major provisions of the UDAY scheme that have been taken into the account while preparing the revised ARR:
75% of outstanding debt as on 30.09.2015 to be taken over in the form of equity / loan / Grant to DISCOMS.
Take-over in year 1: 50%, Year 2: 25%
Take-over assumed at the end of second quarter from year 2.
Total Loan of Rs. 21150 Cr for UHBVN has been assumed to be taken over by the Govt. of Haryana under UDAY scheme including the FRP loans as well as HVPNL liabilities.
The Bonds have been issues at an coupon rate of 8.21%
ROI of balance 25% loan: Base rate+0.1% w.e.f. 01.04.2016 at present 9.80% (Bank rate of lead bank -OBC).
Therefore, in order to operationally and financially turnaround the Discoms, the Commission must consider the interest on the UDAY Bonds and loan considered under UDAY and other loan as the interest of the same is borne by the license and
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 the disallowance of it would lead to unnecessary financial burden on the already financially distressed Discoms.
Depreciation
For the FY 2017-18 UHBVNL has estimated depreciation charges based on the estimated additions in GFA as per its Capital Investment plan for the FY 2017- 18. The transfer of total Capex to the Fixed Asset has been considered as 60%. UHBVNL has considered the Capital Expenditure of Rs 800.00 Cr as approved by the Commission for FY 2017-18 and for FY 2018-19 the Nigam proposes a Capital expenditure of Rs 1484.35 Cr.
For the purpose of projecting depreciation charges for the FY 2017-18 and 2018-19 the Petitioner has considered the category-wise actual depreciation rates (as a percentage of opening balance of asset-class-wise GFA for that year). Accordingly, UHBVNL has claimed Rs. 314.33 Crore and Rs. 342.28 Crore in FY 2017-18 and FY 2018-19 respectively towards depreciation charges.
Operation and Maintenance Expenses (O&M)
The Petitioner has submitted that they have calculated the various components of O&M expenses as per the methodology, including the indexation mechanism, as provided in the MYT Regulations, 2012. Accordingly, the Petitioner has claimed Rs. 1396.07 Crore and Rs. 1334.49 Crore (inclusive of Rs. 300 Crore towards terminal benefits in each year) towards O&M expenses for the FY 2017-18 and the FY 2018-19 respectively. The same is inclusive of employee cost of Rs. 879.63 Crore and Rs. 803.02 Crore for the FY 2017-18 and FY 2018-19, respectively. Employee cost for the FY 2016-17 has been calculating with an additional increase of 12% on account of 7th pay commission recommendations apart from normal 3% annual escalation on account of increments and inflation for other allowances. Also Rs. 100 crores has been added as one time expenditure towards onetime payment of arrears of 7th pay Commission. The Petitioner has considered the indexation factor as 1.80% based on WPI/CPI indices for the FY 2016-17 and the FY 2017-18.
Employee Expenses
The Petitioner has submitted that the employee expenses primarily include costs towards salaries, dearness allowances, bonus, staff welfare and medical
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 benefits, leave travel and earned leave encashment, and the terminal benefits in the form of pension, gratuity etc.The annual increment of 3% as normal increment and 12% as increment due to 7th Pay Commission has been considered in the revised basis salary calculated as per 7th pay commission i.e. summation of the Basic and DA salary as per the Annual audited accounts of FY 2016-17. Further, other allowance have also been increased by 3% to arrive at employee cost for FY 2017- 18 & FY 2018-19.
Also, Rs 100 Cr has been added as onetime expense towards payments for arrears of 7th Pay Commission. An amount of Rs. 300 Cr for FY 2017-18 and Rs 300 Cr for FY 2018-19 as Terminal benefits is also included in the aforementioned amount of employee expense of FY 2017-18 and FY 2018-19.
Employee Expenses for FY 2017-18 and FY 2018-19 (In Cr.)
Sr. no. Particulars FY 2017-18 FY 2018-19 1 Salaries 656.17 675.85 2 Dearness Allowance 32.81 33.79 3 Other Allowances 205.56 108.73 4 Terminal benefits 300.00 300.00 5 Gross Employee Expense 1,194.54 1,118.38 6 Less Expenses Capitalised 14.91 15.35 7 Net Employee Expenses 1,179.63 1,103.02 Repair & Maintenance Expanses
The petitioner has projected R&M expenses for FY 2017-18 and FY 2018-19, as per the formula defined in MYT regulations, 2012 and same has been quoted again as below:
(a) R&Mn= K * GFA * INDXn / INDXn-1
Where,
‘K’ is a constant (expressed in %) governing the relationship between O&M costs and Gross Fixed Assets (GFA) for the nth year. The value of K will be 1.65% for UHBVN and UHBVN respectively for the entire control period;
‘GFA’ is the average value of the gross fixed asset of the nth year.
‘INDXn’ means the inflation factor for the nth year as defined herein after.
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The petitioner has projected R&M expenses for FY 2017-18 and FY 2018-19, on the applicable/ approved average GFA of UHBVNL with the appropriate inflation factor i.e. 1.80%, tabulated as below:
R&M Expenses for FY 2017-18 and FY 2018-19 (In Cr.)
Sr. no. Particulars FY 2016-17 FY 2017-18 FY 2018-19 Actual Projected Projected 1 Estimated R&M Expense 62.42 118.29 131.56 R&M Expense has been projected @ 1.80% inflation factor for FY 2017-18 and as per MYT Regulations 2012, the K factor being considered 1.65% at average GFA
The Petitioner has requested the Commission to approve total R&M expenses for FY 2017-18 and FY 2018-19 as per above submission.
Administration & General Expenses
The Petitioner has submitted that the Administration and General expenses mainly comprise costs towards rent charges, telephone and other communication expenses, professional charges, conveyance and travelling allowances and other debits.
As per MYT Regulations, 2012, the Inflation factor of 1.80% has been considered over FY 2016-17 to arrive at A&G cost for FY 2017-18 and FY 2018-19. The computation of A&G cost considering expenses works out to as below:
A&G Expenses for FY 2017-18 and FY 2018-19 (In Cr.)
Sr. No. Particulars FY 2016-17 FY 2017-18 FY 2018-19 1 Gross A&G Expenses 98.19 99.96 101.77 2 Less: Expenses Capitalised 1.79 1.82 1.86 3 Net A&G Expenses 96.40 98.14 99.91 The Petitioner has requested to the Commission to approve total A&G expenses for FY 2017-18 and FY 2018-19 as per above submission.
Summary of O&M Expanses
The summary of projected O&M expenses as per MYT Regulation, 2012, projected above for FY 2017-18 and FY 2018-19 is tabulated below for reference:
Summary of O&M Expenses for FY 2017-18 and FY 2018-19 (In Cr.) Particulars FY 2016-17 FY 2017-18 FY 2018-19 Actual Projected Projected Employee Expense 647.39 879.63 803.02
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Particulars FY 2016-17 FY 2017-18 FY 2018-19 Actual Projected Projected A&G Expense 96.40 98.14 99.91 R&M Expense 62.42 118.29 131.56 Terminal Benefit 421.06 300.00 300.00 Total 1,227.28 1,396.07 1,334.49 UHBVN has requested to the Commission to approve total O&M expenses for FY 2017-18 and FY 2018-19 as tabulated above.
Non-Tariff Income
The Petitioner has submitted that the Commission while approving the Annual Revenue Requirement for the FY 2017-18 has approved a Non-Tariff Income of Rs 197.25 Cr. The petition has projected the same amount for the FY 2017-18 and FY 2018-19.
Return on Equity (RoE)
UHBVNL, in its present Petition, has prayed that the Commission may allow RoE of Rs. 540.33 Crore and Rs. 683.35 Crore, for the FY 2017-18 and FY 2018-19, respectively.
Bad and Doubtful Debts
UHBVNL has submitted that as per Regulation 64 of the MYT Regulation, 2012 it has estimated a provision for bad and doubtful debts of Rs 35.54 Cr and Rs 37.53 Cr for FY 2017-18 and FY 2018-19 respectively.
True–up of RE Subsidy
The Petitioner has submitted that the total agricultural sales approved by the Commission in FY 2016-17 were 9094 MUs and against the same a subsidy of Rs. 5933.54 Cr. for UHBVN and DHBVN was allowed. This amounts to a per unit subsidy of Rs. 6.52/unit. Based on the feeder data, the actual agricultural sales, following HERC methodology of 16% losses on AP Feeder data emerges to 4066.68 MUs for UHBVN and 5034.95 MUs for DHBVN.
Therefore, for total sales of 9101.64 MUs, the eligibility of subsidy emerges to Rs. 5,938.52Cr (9,101.64 MUs*Rs. 6.52 per unit). Consequently, post true up, the surplus subsidy emerges to Rs. 241.83Cr.
Particulars 2016-17 Total RE subsidy allowed by HERC in Tariff order for 2016-17 (Rs Crs) 5,933.54
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Particulars 2016-17 Total Agricultural sales approved by HERC in T.O (Mus) 9,094.00 Approved Per unit Subsidy (Rs./unit) 6.52 Agriculture Sales based on Feeder data minus 16% losses (Mus) UHBVN 4,066.68 Agriculture Sales based on Feeder data minus 16% losses (Mus) DHBVN 5,034.95 Agriculture Sales based on Feeder data minus 16% losses (Mus) 9,101.64 Eligibility of subsidy based on actual sales of 2016-17 (Rs. Crs) 5,938.52 Subsidy Outstanding/(Surplus) (Rs. Crs) 4.98
Revenue Estimation
The Petitioner has projected the revenue from intra-state sales for the FY 2017-18 based on the sales projected above. The projected sales is distributed subcategory wise based on the past years sub-category wise distribution and multiplying the projected and subcategory wise distributed sales of the 1st Quarter with the Tariff determined by the Commission vide the Tariff Order dated 01.08.2016. The Commission had notified the Tariff Order dated 11.07.2017 wherein the Commission had revised the tariff applicable to all the categories except for Domestic consumers having consumption less than 150 units per month and AP consumer. Therefore, the licensee has projected the revenue for the period starting from July’17 to March’18 based on the aforementioned Tariff Order dated 11.07.2017. Similarly, the licensee has projected the revenue for the FY 2018-19.
Accordingly, the revenue for Intra-State Sales have been estimated as Rs. 7108.88 Crore and Rs. 7506.46 Crore for the FY 2017-18 and the FY 2018-19 respectively after considering collection efficiency of 99%.
Revenue from Inter-State Sales
Revenue from inter-state sales projected for FY 2017-18 and FY 2018-19 has been considered at 80% of average variable power purchase cost.
Agriculture Subsidy
UHBVNL has submitted Agriculture Subsidy for the FY 2018-19 have been taken after escalating the approved subsidy of FY 2017-18 i.e. Rs. 6550.86 Cr by 5%.
2.2.2 Proposed ARR (UHBVNL) Summary of the aggregate revenue requirement, proposed by UHBVNL, is as under:-
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Summary of ARR for FY 2017-18 & FY 2018-19 of UHBVNL (Rs. Crore)
Summary of ARR of UHBVN FY 2017-18 FY 2017-18 FY 2018-19 Sr. no Particulars Approved Projected Projected 1 Total Power Purchase Expense 9,146.58 10,702.89 10,643.03 1.1 Power Purchase Expense 8,377.12 9,322.19 9,193.30 1.2 Interstate transmission Charge 611.24 641.80 1.3 Intrastate transmission charges and SLDC charges 769.46 769.46 807.93 2 Operations and Maintenance Expenses 1,226.34 1,396.07 1,334.49 2.1 Employee Expense 617.66 879.63 803.02 2.2 Administration & General Expense 81.06 98.14 99.91 2.3 Repair & Maintenance Expense 127.62 118.29 131.56 2.4 Terminal Liability 400.00 300.00 300.00 3 Depreciation 310.17 314.33 342.28 4 Total Interest & Finance Charges 336.45 314.82 346.33 4.1 Net Interest on Capex Loans 115.39 151.62 4.2 Interest on Working Capital(Normative Basis) 121.15 109.46 4.3 Interest on Consumer Security Deposits 75.68 85.24 4.4 Other Interest and Finance charges 2.60 - 5 Return on Equity Capital 191.56 540.33 683.35 6 Other Expenses 35.54 37.53 7 Total Expenditure 11,211.10 13,303.99 13,387.01 8 Interest on Actual Loans 336.45 1,173.14 1,128.14 8.1 Interest on UDAY bonds payable to the State 628.90 377.02 Government Interest on remaining loans 8.2 Interest on WC loans including CC/OD limits 457.79 589.07 8.3 Interest on CAPEX loans 115.39 151.62 8.4 Interest Cost on Consumer Security Deposit 75.68 85.24 8.5 Guarantee Fees 2.60 - 8.6 Interest Cost of Jind Loans (107.23) (74.81) 9 Actual Expenditure (Adjusted with Normative interest 11,211.10 14,162.31 14,168.83 on Loan) 10 Less: Non-Tariff Income 197.25 197.25 197.25 11 Net Aggregate Revenue Requirement 11,013.85 13,965.06 13,971.58 12 Total Revenue - 7,633.95 8,138.02 12.1 Revenue from Interstate sales 525.07 631.56 12.2 Revenue from Intrastate sales / Sale of Power 7,108.88 7,506.46 13 Net Gap (6,331.11) (5,833.56) 14 AP-Subsidy 3,930.52 4,127.04 15 GAP After AP Subsidy - (2,400.59) (1,706.52)
Wheeling and Retail Supply ARR of UHBVN
Summary of ARR of UHBVN FY 2017-18 FY 2017-18 FY 2018-19 FY 2018-19 Sr. Particulars Wheeling Retail Wheeling Retail Wheeling Retail No 1 Total Power Purchase Expense - 10,702.89 - 10,643.03 1.1 Power Purchase Expense 0% 100% - 9,322.19 - 9,193.30 1.2 Interstate transmission Charge 0% 100% - 611.24 - 641.80 1.3 Intrastate transmission charges and 0% 100% - 769.46 - 807.93 SLDC charges 2 Operations and Maintenance 690.25 705.82 663.51 670.99 Expenses 2.1 Employee Expense 48% 52% 422.22 457.41 385.45 417.57 2.2 Administration & General Expense 42% 58% 41.22 56.92 41.96 57.95 2.3 Repair & Maintenance Expense 70% 30% 82.81 35.49 92.09 39.47 2.4 Terminal Liability 48% 52% 144.00 156.00 144.00 156.00 3 Depreciation 82% 18% 257.75 56.58 280.67 61.61
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Summary of ARR of UHBVN FY 2017-18 FY 2017-18 FY 2018-19 FY 2018-19 Sr. Particulars Wheeling Retail Wheeling Retail Wheeling Retail No 4 Total Interest & Finance Charges 116.22 198.59 147.41 198.92 4.1 Net Interest on Capex Loans 90% 10% 103.85 11.54 136.46 15.16 4.2 Interest on Working Capital(Normative 10% 90% 12.11 109.03 10.95 98.51 Basis) 4.3 Interest on Consumer Security Deposits 0% 100% - 75.68 - 85.24 4.4 Other Interest and Finance charges 10% 90% 0.26 2.34 - - 5 Return on Equity Capital 90% 10% 486.30 54.03 615.02 68.34 6 Other Expenses 29% 71% 10.31 25.24 10.88 26.65 7 Total Expenditure 11% 89% 1,560.84 11,743.15 1,717.49 11,669.53 8 Interest on Actual Working Loans 202.06 971.08 225.59 902.55 8.1 Interest on UDAY bonds 10% 90% 62.89 566.01 37.70 339.32 Interest on 25% remaining loans under UDAY 8.2 Interest WC loans under UDAY 10% 90% 45.78 412.02 58.91 530.16 including CC/OD limits 8.3 Interest on CAPEX loans 90% 10% 103.85 11.54 136.46 15.16 8.4 Interest Cost on Consumer Security 0% 100% - 75.68 - 85.24 Deposit 8.5 Guarantee Fees 10% 90% 0.26 2.34 - - 8.6 Interest Cost of Jind Loans 10% 90% (10.72) (96.51) (7.48) (67.33) 9 Actual Expenditure (Adjusted with 1,646.67 12,515.64 1,795.67 12,373.16 Normative interest on Loan) 10 Less: Non-Tariff Income 11% 89% 21.70 175.55 21.70 175.55 11 Net Aggregate Revenue Requirement 1,624.97 12,340.09 1,773.97 12,197.61 2.2.3 ARR of DHBVNL (a) Summary of ARR The Petitioner i.e. DHBVNL, has followed similar methodology as adopted by UHBVNL (as discussed above) for proposing various components of True-up for the FY 2016-17, Annual Performance Review for the FY 2017-18 and revised ARR for the FY 2018-19. Hence, for the sake of brevity, the same are not being reproduced here.
The Petitioner has prayed to continue with the current levels of tariff and FSA based on which the total gap after True-up for FY 2016-17 comes at Rs.2,240.15 Crs; after re-assessment of ARR gap for FY 2017-18 comes out to be Rs. 2,502.42 Crs and for FY 2018-19 at Rs. 1,649.85 Crs respectively. The resultant gap after continuation of current levels of tariff will be met through the OFR as proposed under UDAY.
(b) Energy Balance and Power Purchase for Haryana for FY 2017-18 and FY 2018-19 The power purchase quantum has been projected by the Petitioner at 29,380.32 MUs and 29854.76 MUs at a cost of Rs. 13841.47 Crore and 13803.21 Crore for the FY 2017-18 and the FY 2018-19 respectively inclusive of transmission charges and prior period expenses.
Energy Balance for Haryana for the FY 2017-18 and FY 2018-19
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Energy Balance Units FY 2017-18 FY 2018-19 Power Purchase at State Periphery Mus 29,380.32 29,845.76 Energy Sales to the Consumers Mus 20,485.07 21,623.39 Distribution loss %age 18.76% 15.00% Energy Sales at Discom Periphery Mus 24,963.52 25,184.90 Intra- State Transmission Loss %age 2.46% 2.46% Energy Sales at State Periphery Mus 25,593.11 25,820.07 Surplus Mus 3787.21 4025.69 The Petitioner also submitted the bulk supply tariff as under:- Bulk Supply Tariff Units FY 2017-18 FY 2018-19 Net energy available at state boundary for use in Mus 29,380.32 29,845.76 DHBVN Intra-state transmission losses % 2.46% 2.46% Intra-state transmission losses Mus 722.76 734.21 Energy available for sale to distribution licensee Mus 28,657.57 29,111.56 at its periphery Power purchase cost Rs Cr 11,296.27 12,025.08 Inter-state transmission charges Rs Cr 790.39 843.74 Intra-state transmission charges Rs Cr 904.36 934.38 Prior Period Expense Rs Cr 850.45 - Total bulk purchase and transmission charges Rs Cr 13,841.47 13,803.21 Power purchase per unit at Generator Ex-bus Rs/Kwh 3.94 4.13 Inter-state transmission charges Rs/Kwh 0.28 0.29 Intra-state transmission charges Rs/Kwh 0.32 0.32 Prior Period Expense Rs/Kwh 0.30 - Average BST for DHBVN Rs/Kwh 4.83 4.74
(c) Transmission Losses
For the FY 2017-18, the Inter-State transmission losses and the Intra-State transmission losses have been considered by DHBVNL as 3.82% and 2.46% respectively as approved by the Commission in its MYT Order for the FY 2017-18.
(d) Distribution losses (AT&C Losses) DHBVNL has projected Distribution Losses for the FY 2017-18 and the FY 2018-19 at 18.76% and 15.00% respectively.
(e) Non-Tariff Income The petitioner projected the non-tariff income, in line with the approved figures for FY 2017-18. Although, the actual audited figure of Non tariff income for the FY 2016-17 is Rs 636.99 Cr. The Petitioner has requested to the Commission to
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 approve non-tariff income of Rs. 247.47 Cr. for each year i.e. for the FY 2017-18 & FY 2018-19.
(f) Capital Expenditure The Petitioner has submitted that the Commission had approved its proposal in respect of Capex Plan of Rs.1100 Crore for the FY 2017-18. DHBVN has estimated that the expenditure of Rs 1100 Cr as approved by the Commission in FY 2017-18, will actually be incurred. In order to achieve the loss targets as proposed in the following chapters, DHBVN proposes Capital Expenditure of Rs 1300 Cr for FY 2018-19.
The funding of capital expenditure in FY 2017-18 and FY 2018-19 is being arranged by debt from REC, PFC and supported further from equity and consumer contribution.
DHBVNL has further projected all other components of the ARR on the same methodology as adopted by UHBVNL. The aggregate revenue requirement for the FY 2017-18 and the FY 2018-19 including its disaggregation into Wheeling and Supply business filed by DHBVNL is as under:-
Proposed ARR for FY 2017-18 and FY 2018-19 (DHBVNL) Sr. Particulars FY 2017-18 FY 2017-18 FY 2018-19 No. Approved Projected Projected 1 Total Power Purchase Expense 11,925.86 13,841.47 13,803.21 1.1 Power Purchase Expense 11,021.51 12,146.73 12,025.08 1.2 Interstate transmission Charge - 790.39 843.74 1.3 Intrastate trans. charges and SLDC charges 904.36 904.36 934.38 2 Operations and Maintenance Expenses 1,367.00 1,399.16 1,399.52 2.1 Employee Expense 790.12 884.90 820.03 2.2 Administration & General Expense 77.72 83.67 85.18 2.3 Repair & Maintenance Expense 114.16 129.60 151.06 2.4 Terminal Liability 385.00 301.00 343.25 3 Depreciation 288.87 299.06 364.59 4 Total Interest & Finance Charges 343.99 406.23 445.59 4.1 Net Interest on Capex Loans 122.06 146.69 184.73 4.2 Interest on Working Capital (Normative 125.91 180.97 179.99 Basis) 4.3 Interest on Consumer Security Deposits 93.02 74.81 76.87 4.4 Other Interest and Finance charges 3.00 3.76 4.01 5 Return on Equity Capital 173.16 406.91 511.13
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Sr. Particulars FY 2017-18 FY 2017-18 FY 2018-19 No. Approved Projected Projected 6 Other Expenses 53.84 57.76 7 Total Expenditure 14,098.89 16,406.68 16,581.79 8 Interest on Actual Working Loans 888.53 900.92 8.1 Interest on UDAY bonds payable to the State 399.94 239.76 Government Interest on remaining loans 8.2 Interest on WC loans including CC/OD limits 174.54 339.18 8.3 Interest on CAPEX loans 146.69 184.73 8.5 Interest Cost on Consumer Security Deposit 74.81 76.87 8.6 Guarantee Fees 3.76 4.01 8.7 Interest Cost of Jind Loans 88.79 56.37 9 Actual Expenditure (Adjusted with 14,098.88 16,888.98 17,037.12 Normative interest on Loan) 10 Less: Non-Tariff Income 247.47 247.47 247.47 11 Net Aggregate Revenue Requirement 13,851.42 16,641.51 16,789.65 12 Total Revenue - 11,518.75 12,388.44 12.1 Revenue from Interstate sales 750.61 836.97 12.2 Revenue from Intrastate sales / Sale of 10,768.14 11,551.47 Power 13 Net Gap (5,122.76) (4,401.21) 14 AP-Subsidy 2,620.34 2,751.36 15 GAP After AP Subsidy (2,502.42) (1,649.85)
Wheeling and Retail ARR for FY 2017-18 and FY 2018-19 ARR of DHBVNL Summary of ARR of DHBVN FY 2017- FY 2017- FY 2018- FY 2018- 18 18 19 19 Sr. Particulars Wheeling Retail Wheeling Retail Wheeling Retail No 1 Total Power Purchase Expense - 13,841.47 - 13,803.21 1.1 Power Purchase Expense 0% 100% - 12,146.73 - 12,025.08 1.2 Interstate transmission Charge 0% 100% - 790.39 - 843.74 1.3 Intrastate transmission 0% 100% - 904.36 - 934.38 charges and SLDC charges 2 Operations and Maintenance 695.09 704.07 699.89 699.63 Expenses 2.1 Employee Expense 48% 52% 424.75 460.15 393.61 426.41 2.2 Administration & General 42% 58% 35.14 48.53 35.77 49.40 Expense 2.3 Repair & Maintenance Expense 70% 30% 90.72 38.88 105.74 45.32 2.4 Terminal Liability 48% 52% 144.48 156.52 164.76 178.49 3 Depreciation 82% 18% 245.23 53.83 298.97 65.63 4 Total Interest & Finance 150.50 255.74 184.65 260.94 Charges 4.1 Net Interest on Capex Loans 90% 10% 132.02 14.67 166.25 18.47 4.2 Interest on Working 10% 90% 18.10 162.87 18.00 161.99 Capital(Normative Basis) 4.3 Interest on Consumer Security 0% 100% - 74.81 - 76.87
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Summary of ARR of DHBVN FY 2017- FY 2017- FY 2018- FY 2018- 18 18 19 19 Sr. Particulars Wheeling Retail Wheeling Retail Wheeling Retail No Deposits 4.4 Other Interest and Finance 10% 90% 0.38 3.39 0.40 3.61 charges 5 Return on Equity Capital 90% 10% 366.22 40.69 460.01 51.11 6 Other Expenses 29% 71% 15.61 38.23 16.75 41.01 7 Total Expenditure 11% 89% 1,472.65 14,934.03 1,660.27 14,921.52 8 Interest on Actual Working 198.73 689.81 230.19 670.74 Loans 8.1 Interest on UDAY bonds 10% 90% 39.99 359.95 23.98 215.79 8.2 Interest on 25% remaining WC 10% 90% 17.45 157.08 33.92 305.26 loans under UDAY including CC/OD limits 8.3 Interest on CAPEX loans 90% 10% 132.02 14.67 166.25 18.47 8.4 Interest on Loans taken after 10% 90% - - - - 1st Oct 2015 but before MoU 8.5 Interest Cost on Consumer 0% 100% - 74.81 - 76.87 Security Deposit 8.6 Guarantee Fees 10% 90% 0.38 3.39 0.40 3.61 8.7 Interest Cost of Jind Loans 10% 90% 8.88 79.91 5.64 50.73 9 Actual Expenditure (Adjusted 1,520.88 15,368.10 1,705.81 15,331.32 with Normative interest on Loan) 10 Less: Non-Tariff Income 11% 89% 27.22 220.25 27.22 220.25 11 Net Aggregate Revenue 1,493.66 15,147.85 1,678.58 15,111.07 Requirement
Thus, the Petitioner(s) UHBVN and DHBVN have estimated net cash gap in the FY 2018-19 at Rs. 1706.52 Crore and Rs.1649.85 Crore respectively.
2.3 Public Proceedings
In accordance with the provisions of Section 64 (2) of the Electricity Act, 2003, UHBVNL & DHBVNL published their respective petitions, in abridged form, in order to ensure public participation. The Public Notice was issued by UHBVNL in the Dainik Bhaskar (Hindi) dated 09.12.2017 & The Tribune (English) dated 09.12.2017 and by DHBVNL in The Tribune (English) on 07.12.2017 and Dainik Bhaskar (Hindi) on 06.12.2017, inviting objections / suggestions / comments from the stakeholders. The petitions were also hosted by UHBVNL & DHBVNL on their respective websites i.e. www.uhbvn.org.in and www.dhbvn.org.in
Subsequently, the Commission issued Public Notice in the Hindustan Times (English) and Dainik Bhaskar (Hindi) dated 17.08.2018 inviting objections and intimating the date of hearing the Petition(s). The Public Notice was also hosted on the website of the Commission under the heading “Schedule of Hearings”.
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The issue of quorum was also deliberated, as the HERC is a three Member Commission. The post of one Member is lying vacant w.e.f. 09.09.2018 with completion of tenure of one Member. While the second Member, Sh. Debashish Majumdar, since 10.09.2018 has made himself unavailable to participate in the hearings held to dispose of the cases filed/pending in the Commission. At this juncture it may be appropriate to refer to the judgement of the Hon’ble Appellate Tribunal for Electricity, New Delhi dated 02.12.2013 passed in OP No.1 of 2011, as under:- “9. In view of the above decision, we are to direct all the Commissions to conduct the proceedings irrespective of the quorum since the proceedings before the Commission could be conducted even by a single Member. 10. Of course, Section 82 (4) of the Act, 2003 provides that the State Commission shall consist of not more than three Members including Chairperson. However, Section 93 of the Act, 2203 provides that no Act or proceedings of the appropriate Commission shall be questioned or shall be invalidated merely on the ground of any vacancy or defect in the constitution of the appropriate Commission. 11. In our view, since the quorum depends upon the number of Members in the office, even single Member of the Commission including the Chairperson of such a Commission can conduct the proceedings of the appropriate Commission. 12. Therefore, we direct that all the Commissions concerned irrespective of the Regulations with regard to the quorum for a meeting, that Commission, even with a single Member despite that there are vacancies of other Members or Chairperson, can continue to hold the proceedings and pass the orders in accordance with the law. Xxx xxxx 17. We also deem it fit to direct the Commissions to amend the Regulations if any, to the effect that if there is only one Member of the Commission available, the quorum of the proceedings of the Commission also shall be one.”
Thus relying on the judgement (supra), as Chairman and Chief Executive Officer of the Commission and in the interest of all stakeholders including general public, the intimation of non availability of the Member (Shri. Debashish Majumdar) was made to the State Government (being the appointing authority in terms of Section 85 of the Electricity Act, 2003). Subsequent to the above the undersigned proceeded to hold the hearing in the present case after following the due process and in public interest. Hence, the Public hearings were held, as scheduled, on 11.09.2018 at 10:30 A.M. in respect of MYT APR/ ARR/Tariff petitions (including additional surcharge, FSA) of UHBVNL and 11.09.2018 at 03:30 P.M. in respect of MYT APR/ ARR/Tariff petitions of DHBVNL in the Conference Hall of the Commission, as a natural corollary to the Regulatory Proceedings.
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The Discoms i.e. UHBVNL and DHBVNL made detailed presentations of their respective ARR proposals in the hearings wherein they highlighted their various achievements and initiatives to improve efficiencies besides dwelling on the projections/proposals made in their respective Petitions under consideration of the Commission. After the hearing held on 11.09.2018, the Commission has also sought certain additional information from DISCOMs vide memo no. 1697- 98/HERC/Tariff/ARR dated 17.09.2018. The same was replied by UHBVNL vide memo no. Ch-07/SE/RA/N/F-25/Vol-(72) dated 08.10.2018.
A summary of the objections filed by the stakeholders, replies filed by the Discoms and Commission view thereto is as under:-
2.3.1 Objections from Stakeholders and Discoms Reply thereto In response to the Public Notice issued by the Commission in the present case, the stakeholders/general public as listed below filed their objections/comments:-
1. Sh. Sampat Singh
2. Jindal Stainless Limited, through Sh. R.K. Jain Hisar.
3. Sh. Pankaj Bhalotia.
4. ACME CLEANTECH SOLUTIONS PRIVATE
5. Haryana Strips Private Limited
A few stakeholders filed their objections / comments / suggestions after the cut-off date of filing objections as notified by the Commission and they did not forward a copy of the same to the Discoms concerned to enable them to file their reply. Nonetheless, all the objections received in the Commission have been included in the present Order.
A brief summary of the objections and Discoms replies thereto is as under:-
2.3.2 Objections filed by Sh. Sampat Singh I. TRUE UP OF FY 2016-17:
Power Purchase:
The Discoms are bound to purchase power from approved sources of power at the purchase cost approved by the Commission. After the perusal of true-up FY
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2016-17 filed by both the Discoms I have reached the conclusion that most of the power purchase rates are higher than the rates approved by the HERC. Power Purchase source Approved Power Actual Power Purchase Purchase Cost per Cost Per unit in Rs. unit in Rs. Singrauli STPS 1.88 2.12 Rihand –I 2.58 22.75 Rihand -III 2.92 3.26 Unchhahar –I 4.24 4.66 Salal-I 1.23 2.29 Chamara –I 1.90 1.94 MI 1.88 2.09 URI-II 4.13 5.17 SJVNL 2.25 3.64 HPGCL 4.36 5.23 Koderma DLC 3.92 4.66 Biomass Projects 6.15 7.58 Avg. PP Cost excluding HVPN 3.768 4.536 Charge approved
Approved Power purchase cost in Haryana for FY 2016 was Rs.3.768 per unit. But 51267.70 MUs power was purchased by Discoms for Rs. 23225.74 Cr. at the rate of Rs.4.536 per unit. The Power purchase rate was 0.768 per unit more than the rate approved by the HERC which put an additional burden of Rs 3947.61 cr on Discoms.
The Commission should disallow this huge amount to provide relief to the poor consumers. The Discoms should also be warned not to repeat this in future and curb their unlawful practices.
Distribution losses:
A very grim picture of distribution losses has been provided by the Distribution companies. The Distribution losses for 12 years from FY 2005-06 to FY 2017-18, are almost at the same level and hovering around 30% which is unacceptable. These losses are very high as compared to losses in other states like Punjab, HP, and Gujarat etc.
The Distribution losses were 31.74% in the case of UH and 29.33 of DH in 2001-2002, and in 2016-17 these were 30.08% in UH and 21.99 in DH. The consumers can no more tolerate these high losses. The total number of feeders in the State is 9674. In some of the feeders these losses are as high as 90%.
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As stated above there are feeders, both urban and rural on which the losses are consistently above 70% but Discoms have not bothered to get energy audit of such feeders done and take suitable measures to curtail the same. As many as 1006 feeders under UH show 50 % line losses. The most affected pockets are in Rohtak, Jhajjar, Sonipat, Panipat, Karnal and Kaithal.
The problem is equally severe in the supply area of DH where 172 feeders have more than 80% losses. As many as 336 feeders have losses of more than 70%. In the case of 733 feeders losses have been found to be above 50%. An equal number of feeders have line losses ranging between 25% to 50%.
These losses are taking place repeatedly even after making huge capital expenditure on loss reduction. The adverse effect of increase in the cost of supply due to such losses is borne by honest consumers, while the distribution companies are reluctant to take action against the defaulters for want of will power. Most of these losses are caused by the connivance of Discoms with the unscrupulous and corrupt elements. The mounting losses of the two distributions companies are a big drain on the state exchequer. Strangely, the government has done nothing except doling out huge subsidies and infusing funds in the form of equity without any notable improvement in their performance.
The HERC should warn the state government about the slipshod performance of the Discoms in curbing feeder losses in rural areas and the impending financial crisis. This also points to the poor performance by senior officers of the Discoms. I am deeply concerned that even after implementation of Mhara Gaon Jagmag Gaon scheme on RDS feeders, the number of rural feeders with losses above 50% has not reduced at all.
The HERC in its order on 11 July, 2017 had directed the Discoms to file detailed reasons for not achieving their targets of losses within three months. The commission also directed the distribution companies to bring down the total number of rural feeders with line losses above 50% as on 31.03.2017 to half and to bring down the losses of all urban feeders below 25% by the time of next ARR/APR filing. They were further directed to file report on the status of losses on each of these feeders and also prominently display them on their website. Unfortunately the Discoms did not respond. This is a reflection on the working of the Commission.
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AT&C losses:
Under UDAY (Ujjawal Discoms Assurance Yojana) scheme the Discoms were bound to reduce AT&C losses from 28.05% in FY 2015-16, 24.02 in FY 2016-17, 20% in 2017-18 and 15% by FY 2018-19 as per following trajectory.
Year FY 2015-16 FY 2016-17 FY 2017-18 FY 2018-19 AT & C losses 28.05% 24.02% 20.04% 15%
The Distribution companies were directed by the commission in 2017 to explain the reason for under achievement even after re-fixing of their AT&C losses trajectory under UDAY scheme. Again there has been no response from Discoms.
Actual AT & C losses of UH are (27.51% -2.50% transaction losses + .8% commercial loss) 25.81 per cent.
In the present filing of True up for FY 2016-17 by UH the Discoms has admitted that it has been able to achieve actual AT& C loss level of 30.76% against the target of AT&C loss of 24%. So, I would request HERC to reject the Energy Balance for FY 2016-17 as desired by UH in True- up.
Comparison of T&D losses before and after completion of work of MGJG feeders (March, 2017)
Even if we compare T&D losses before and after completion of work of MGJG feeders, the results are below average because many feeders are still having more than 30% T&D losses. I will provide some data of losses.
O&M Expenses for FY 2016-17:
O&M expenses include employees' expenses, administrative and general expenses, repair and maintenance expenses and terminal liability. If we analyze it minutely we find that approved expenses of basic salary were Rs.538.35 cr. of which only 359.13 cr. had been spent i.e. 179.22 cr. less than the approved amount. It is clear that the decreased number of employees had led to adverse results.
Same is the case of repair and maintenance. No serious efforts have been made to repair and maintain the system. The expenses on repair & maintenance
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So, for these two major reasons the additional expenses of Rs. 83.98 Cr on O & M must be rejected.
Additional interest cost on long term loans:
Rs.57.35 cr. was allowed by the Hon'ble HERC but UH has demanded Rs. 176.19 cr. which is three times the approved amount. It should not be allowed.
Similarly Additional amount of interest on working capital and borrowings demanded by UH is Rs.232.59 cr. against the approved amount of 114.0 cr. This should be rejected because the demand is double the approved amount.
Return on Equity:
The UH has demanded 14% per annual equity. The total amount is Rs. 352.85 cr. This is also a futile exercise done every year. How can a company demand return on equity which has already been eroded. This should also be rejected.
Interest on Working Capital & Borrowings:
The Commission has allowed the interest on borrowings for working capital requirement of Rs.1006.49 Cr. Interest at the rate of 11.30% on these borrowings amounts to Rs. 114.00 cr. (113.73 cr.). However the UH has claimed interest for working capital as per actual interest of Rs.232.59 cr. on the basis of audited accounts for FY 2016-17. If calculated this works out to be 23.10% i.e. more than double of 11.30%. It needs to be noted that the interest on capital borrowings may be due to delayed payment or on previous arrears. The poor and honest consumers cannot accept the jugglery of figures prepared by Discoms,
I want to examine a copy of audited statement of this particular amount and the Discoms should give specific reasons to explain the facts. I would request the commission to reject the whole ARR itself on this issue.
Depreciation:
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UHBVNL has claimed depreciation amounting to Rs.262.04 cr. The basis for arriving at the value base of assets on which the depreciation rate asset wise can be applied is the audited Fixed Asset Register (FAR). Thus the claim of UH needs to be backed up by a FAR. In the absence of FAR, depreciation can neither be computed nor should it be allowed by HERC. I always raise this demand before the commission I have not been able to lay my hands on copy of FAR.
Non-Tariff Income:
The actual non-tariff income is Rs. 232.67 Cr. I contest this amount. The UH has not considered the delayed payment surcharge for FY 2016-17 on the pretext that the delayed payment surcharge is collected against the receivable from the consumers that are not received in time. The UH has considered this amount as a carrying cost recovered from the consumers to pay the interest on the increased portion of working capital which occurred because of the delay in receiving the revenue. I question the manner in which the Nigam equalizes the surcharge with the interest on delayed payment. Surcharge has never been calculated for this purpose.
I am sure that the amount recovered from the consumers is on account of penalty in case of theft etc. which is entirely unjustified.
True up of RE subsidy:
The total agriculture sales approved by Hon'ble Commission in FY 2016-17 were 9094 MUs and against the same a subsidy of Rs. 5933.54 cr. for UH and DH was allowed. This amounts to per unit subsidy of Rs. 6.52. Based on the feeder data, the agricultural sales following HERC methodology of 16% losses on AP feeder data comes to 4066.68 MUs for UH and 5034.95 MUs for DH i.e. a total of 9101.64 MUs and subsidy demanded is 5938.52 cr. at the rate of Rs. 6.52 per unit.
Consequently, post true up, the outstanding subsidy comes to Rs. 4.98 cr. If consumption after 16% loss is 9101.64 MU then the power supply was 10834.52 MU. We cannot accept the HERC methodology of 16% losses on AP feeder when the average losses of 2015-16 are 30%. If we consider 30% AP feeder losses the units consumed in AP sector come to 7584 MU by taking in to account 30% losses. The total amount as RE subsidy required is 4944.87 cr. at the rate of Rs 6.52 per
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Moreover the Discoms have not given the details of the amount of RE subsidy paid by the government in the FY 2016-17. We do not know whether the subsidy was paid to the Discoms in advance as per Section - 65 of the Electricity Act 2003 or not. If the government had not provided subsidy in time, the Discoms must have used loan amount in lieu of subsidy for the period of delay in payment of subsidy. Thus the Discoms must have paid interest on that amount.
The total share of consumption of AP energy has been shown as 25% of the total consumption of the State. Here I may point out that the load share of AP category is also 25% of the total connected load of the State. The consumers of other categories get power supply from 12 to 24 hours per day. But the power supply hours for the AP consumers have never been more than 8 per day and that also for some period. Even the commission has estimated that the agriculture pump set consumers are not supplied more than 3.96 hours per pump set per day 365 days in a year. So it is not possible for the AP consumers to use 25% share of the total consumption of the State. I would request the Hon'ble Commission to order third party audit of the AP consumption.
Moreover to cover up the Aggregate losses in other consumers’ category, 1516.36 MU have been uploaded in AP consumption.
ARR filing:
Without submitting consumer category cost of service and tariff proposal to recover the same is a meaningless exercise. UHBVNL should submit both of these documents so that the consumers/ stakeholders get an opportunity to scrutinize the same and submit objections/ comments.
Thereafter the Commission may take a view on the consumer tariff as well as tariff design. The two part tariff including MMC is by and large arbitrary and has caused huge burden on the Domestic, Industrial (both LT and HT) as well as Commercial electricity consumers of the State.
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In the Final True-up of FY 2016-17 in table-11 in the filing of UH and table-13 in the filing of DH, I could not understand the first two figures. True-up of DHBVN after subsidy amounts Rs.632.67 Cr. and again in the next figure of True-up of DHBVN after subsidy amounts Rs. 363.34 Cr. and the total of both is Rs. 996.01 Cr total True-up amount after subsidy.
Same in the case of table -12 since the commission in its tariff order dated 01 August, 2016 has not provided bifurcation of some of the revenue items between DH and UH, hence it is requested that the Hon'ble Commission may kindly approve the appropriate gap based on the expensive of revenue as per annual accounts.
Para 2-19 thus the differences in approved and actual expenditure as per summary table below for DH and DH may be allowed to the distribution companies along with separate allocation of RE subsidy to the Discoms for FY 2016-17.
The revenue gap for FY 2014-15 approved by HERC is Rs. 672.14 Cr. and 25% it's holding cost Rs. 168.02 Cr. i.e. Rs. 840.18 has also been loaded in the Final True-up of FY 2016-17.
We are fed up with these types of revenue gaps arbitrarily calculated by the Discoms and allowed by Hon'ble HERC.
Similarly, 22% holding cost of Rs. 403.96 Cr. on total True-up amount is Rs.1836.19 Cr. of FY 2016-17. By loading these types of holding costs the Discoms have become the money lender under the blessings of HERC.
To conclude on True-up the demand of Rs. 2240.15 cr. is unjustified and may be rejected out rightly.
True up of FY 2016-17 in case of DHBVNL:-
Power Purchase:
My objections are the same as explained in case of UHBVNL.
Distribution & AT&C losses:
Same comments as in UHBVNL;
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O & M Expenses for FY 2016-17:
O&M expenses include employees' expenses, administrative and general expenses, Repair and Maintenance Expenses and Terminal Liability. If we analyze it minutely then it is surprising that approved expenses of basic salary were Rs.629.03 cr. but only 191.64 cr. have been spent i.e. 437.39 cr. less than the sanctioned amount. But the difference has been shown as Rs. 49.70 cr. only. So either the difference shown is wrong or the figure of actual amount is wrong. This shows the lack luster manner of preparing this ARR by the management of Discoms and its highly paid consultants.
It is clear that when the total amount of basic salary is decreasing so the strength of employees of the Discoms is naturally also falling. I wonder how the justice is being done to power consumers with such minimal strength of employees. This is the main reason of the poor service being provided to the consumers of electricity. Same is the case of repair and maintenance. Approved amount of Repair and Maintenance was Rs. 132.77 Cr. but actual amount spent was Rs.68.23 Cr. i.e. just half of the sanctioned amount was spent. Now we understand the reason for the crumbling infrastructure of Discoms. No serious efforts have been made for repair and maintenance.
So, for these two major reasons the additional expenses of Rs.68.98 Cr. on O&M must be rejected.
Additional interest cost on long term loans:
Rs.81.89 Cr. was allowed by the Hon'ble HERC but DH has demanded Rs. 214.10 cr. which is two and half times more than the approved amount. It should not be allowed at any cost. The DH has not given the reason of this actual amount of Rs.214.10 Cr. The rate of interest has also not been given.
Similarly, the DH has sought additional amount of interest on working capital & borrowings. The DH has demanded Rs.842.97 Cr. actual interest on working capital requirement of Rs. 1023.31 Cr. against the approved amount of Rs.108 Cr. because the demand is eight times more. No sensible consumer can allow this type of calculation. So this must be disallowed.
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Return of Equity:
The DH has demanded 14% per annual equity. The total amount on ROE demanded is Rs.281.17 Cr. which is also a futile exercise done every year. How a company can demand Return on Equity which has already been eroded. This should also be rejected.
Depreciation:
DHBVNL has claimed depreciation amounting to Rs.267.62 Cr. Now the actual amount comes out to be Rs. 215.49 Cr. The basis for arriving at the value base of assets on which the depreciation rate asset wise can be applied is the audited Fixed Asset Register (FAR). Thus the claim needs to be backed up by a FAR. In the absence of FAR depreciation can neither be computed nor should it be allowed by HERC.
Non-Tariff Income:
The actual non-tariff income is Rs. 542.86 Cr. I contest this figure. The DH has not considered the delayed payment surcharge for FY 2016-17 on the pretext that the delayed payment surcharge is collected against the receivable from the consumer that are not received in time. The DH has considered this amount as a carrying cost recovered from the consumers to pay the interest on the increased portion of working capital which occurred because of the delay in receiving the revenue. I question that how the Nigam can equalize the surcharge with the interest on delayed payment. Surcharge has never been calculated for this purpose. Discoms always boated that a special campaign was launched to disconnect the premises of defaulting consumers. My observations are that after disconnections the consumer started consuming power directly from the Kundi connections without any payment. I want to attract the attention of the commission that the Discoms never cared while preparing the ARR which is annual exercise. At least officers are totally dependent on air consultants. These officers even do not take pain of reading once. But when we go through the lengthy process of reading the filing we could not understand their figures and nomenclature. There are many mistakes in present ARR in different tables.
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I am sure that the amount recovered from the consumers on account of penalty in case of theft etc. must have been added in the category of collection from the consumers which are not justified. This income should be added in the non-tariff income.
True-up of RE subsidy:
The issue has already been taken up in True-up of RE subsidy of UHBVNL.
Note: - The True-up amount along with the holding cost has already been discussed in case of UHBVNL.
Annual Performance Review for FY 2017-18 and Annual Revenue Requirement for FY 2018-19: -
Capital Expenditure:
Capital Expenditure of Rs 1200 Cr. and Rs 1055.77 Cr was approved for DH and UH respectively for the FY 2016-17. Actual Capital expenditure was Rs. 640.93 Cr. and Rs 371.31 Cr. for DH and UH resp. out of total capital expenditure Rs 2255.97 Cr for both Discoms only Rs.1012.24 Cr were spent actually i.e. 44.86% only. How can we believe that the Capital expenditure of Rs.1900 Cr. for FY 2017-18 and Rs. 2784.35 Cr. for FY 2018-19 for both the Discoms will be actually done by the year end after seeing their efficiency of work?
Transmission and Distribution losses:
The target laid down in the UDAY MOU the committed AT&C losses were 25.94% for FY 2016-17 but UH has been able to achieved actual AT&C loss level of30.76% which was in FY 2001-2002. Further as per UDAY MOU both the Discoms were required to achieve an AT&C loss level of 15% for FY 2018-19. How can we believe that UH could reach the target?
Even the UH itself has fixed AT&C target of 24.76% for FY 2017-18 and 20.80% for the FY 2018-19. Moreover in UDAY agreement it was clearly pointed out that if the target in a particular year is not met, then the discoms shall strike to achieve the targets in the subsequent years so as to achieve the desired target of
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15% AT&C losses by FY 2018-19. Now where does the UH stand in its commitment. The UH must be penalized and no gap should be allowed.
Discoms make RS.619 Cr profit of the losses for 14 years and the credit for turnaround goes to center's scheme.
I was very happy to read this news in the prominent newspapers. It was looking like a miracle. The share of profits earned by DH and UH being Rs. 134 cr. and Rs. 278 Cr. respectively. Even the Chief Minister Manohar Lal Khattar had recently announced that the govt. was contemplating reducing power tariff since the discoms have started earning profits after long time. "This is all because of increase in efficiency brought about in the functioning of PSLUs responsible for generation, transmission and distribution of electricity through better management. The results in the improved efficiency are evident from the marked decline in aggregated technical and commercial AT&C losses, of the discoms in the past 4 years" P.K. Dass ACS Power Department. According to ACS power, AT&C losses came down to 25.57 % in FY2016-17 and have now further down to 2.20 % in 2017-18.
"The commercial losses came down by curbing pilferage of power, improving recoveries of bills and borrowing down line losses by replacing old lines and transformers with new and better performing one" he added.
The credit for this turn around goes to center's scheme called UJJWAL DISCOMS ASSURANCE YOJANA (UDAY) launched in 2015 under this yojana. The State Govt. took over loan of Rs. 25950 Cr. out of total loan burden of Rs. 35000 Cr. on Discoms. The Govt. saved the Discoms from annual interest liability of nearly Rs.2600 Cr.
Seeing this rosy picture, the consumers were hoping for reduction in tariff rates. Even after such positive results of the Discoms and parting of Rs.2600 Cr per year from State exchequer, the discoms are demanding gap of Rs. 6347.26 Cr and Rs. 5415.72 Cr for UH and DH resp. in their petitions for True-up of FY 2016-17, APR FY 2016-17 and ARR for FY 2018-19. Rs. 11762.98 cr. is needed for meeting out these huge gaps. Contrary to the CM Announcement, the Discoms are requesting to the Hon'ble Commission to continue with the current levels of tariff and
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FSA. Both the Statements are self-Contradictory in the nature. After this much improvement the consumers deserve subsequently reduction in tariff.
Moreover the discoms have filed their petition separately but still we could not understand their calculations which includes sometimes collective and on the other occasion separately. They could not make up their mind as how to prepare this petition. Net ARR requirement of DH is Rs. 16789.65 Cr. and Rs. 13971.58 Cr. of UH.
So this net ARR may be disallowed. The consumers deserve reduction in power tariff and abolition of FSA.
UDAY scheme:
The Govt. of Haryana has taken over the liability of both the discoms of Rs.25950 Cr. The Govt. is paying the interest of Rs. 2600 Cr. per year. So this expenditure is also being born by the public / electricity consumers. The total annual power sales for DH and UH for the FY 2018-19 are 37321.34 MU. So against the payment of Rs. 2600 cr. by the consumers, the discoms should pass reduction of 70 paisa per unit to the consumers.
Surplus Power Purchase of DH:
Energy balance for DH shows that there would be 378.72 cr. units and 402.56 cr. units in the FY 2017-18 and FY 2018-19. The Nigam assumed that the surplus power available will be sold entirely as 'interstate sales' throughout FY 2017-18 and FY 2018-19 at 80% of average variable power purchase cost. This statement of the Discoms is totally farce. Average BST for DHBVN is Rs.4.83 per unit and Rs.4.74 per unit for the FY 2017-18 and FY 2018-19 respectively. The total cost of purchase of 378.72 cr. units would be Rs. 1829.21 for FY 2017-18. The cost of purchase of 402.56 Cr units at the rate of Rs. 1908.13 for FY 2018-19. But the revenue collection of the above said surplus power as interstate sales has been shown as respectively Rs. 750.61 Cr. and Rs.836.97 cr. in FY 2017-18 and FY 2018-19. So the total loss in the purchase and sales of the surplus power would be Rs. 1157.52 cr. and Rs. 1071.16 in FY 2017-18 & FY 2018-19 respectively.
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Similarly Surplus power i.e. Energy balance of UH would be 264.46 Cr. unit in FY 2017-18 and 303.30 Cr. unit in FY 2018-19. Revenue collection against these sales is estimated to be Rs. 525.07 Cr. & Rs.631.56 Cr. would be in FY 2017-18 & FY 2018-19 respectively. But the cost of purchase is estimated at the rate of 4.83 per unit of 264.46 cr. units would be Rs. 1277.34 cr. for the FY 2017-18 and at the rate of 4.74 per unit of 303.30 cr. units would be Rs. 1437.64 cr. So the loss of surplus power of purchase and sale would be Rs. 752.27 cr. in the FY 2017-18 and it would be Rs. 806.08 cr. in FY 2018-19 respectively.
To conclude in the game of surplus power purchase and sale would cost the consumers Rs. 1909.79 cr. and Rs. 1877.24 cr. in FY 2017-18 & FY 2018-19 respectively.
The total annual power sales for DH and UH for the FY 2018-19 are 37321.34 MU. So if the purchase of surplus power have been avoided it would have benefited to the consumers in FY 2018-19, 50.29 paisa per unit. So I would request the Hon'ble Commission to give a relief of 50.29 paisa per unit in the tariff to the consumers.
Improvement in recoveries of Bills:
The Govt. and the management also boasted of improving recoveries of outstanding bills. This claim is also hollow and misleading. The total defaulting amount of DH and UH in June 2015 was 5747.06 Cr. The latest defaulting amount of DH and UH both as in May, 2018 was 7820.28 Cr. Increase in defaulting amount in three years is Rs. 2073.22 Cr. i.e. 36%.
For Example:
The number of individual villages where the defaulting amount was Rs. 1 Cr. or more was 480 but in the last 3 years the number of such villages has reached 718. The leading village in defaulting amount is Khanda Kheri against which the defaulting amount stood at 78 Cr. in March, 2018.
Similarly, there are three villages having defaulting amount more than 60 Cr. each, 77 villages have the credit of defaulting amount pending more than 10 Cr.
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Sr. Villages Circle SDO Def. amt. Def. amt. of Def. amt. Def. amt. No of Jul-15 Sep-16 in of Sep- 17 of Mar- in Crore Crore in Crore 18 in Crore 1 Khanda Hsr narnaund 51.50 63.68 72.22 77.93 2 RAJPURA Jind SU SD No-1, Jind 48.50 65.01 65.08 69.38 3 KILOI Rtk Bhalout 57.00 59.00 61.91 62.68 4 SAMLO KALAN Jind Julana 34.00 47.09 55.15 57.19 5 Bass Hsr Mundhal 42.50 56.76 51.87 56.76 6 Titoli rtk SU SD Rtk 52.45 53.42 54.71 55.78 7 Koth Kalan/ Khurd Hsr Narnaund 27.50 33.90 38.45 44.54 8 Ladwa Hsr Satrod 26.25 34.33 34.33 39.84 9 Puthi Hsr Mundhal 22.00 24.08 35.25 36.46 10 Kapro Hsr Narnaund 22.50 27.62 31.45 35.22 11 kandela Jind Naguran 27.22 30.86 33.67 35.07 12 Alewa Jind Naguran 29.20 31.20 33.61 34.64 13 Ugalan Hsr Narnaund 24.50 32.86 34.31 30.88 14 PONKARI KHERI Jind SU SD No-1, Jind 21.00 27.68 28.23 30.39 15 RAMRAI Jind SU SD No-1, Jind 19.25 24.33 27.54 30.12 16 Mirchpur Hsr Narnaund 20.00 25.15 27.87 29.76 17 Madina Rtk Meham 12.50 18.56 19.04 28.55 18 Baland rtk SU SD Rtk 13.73 28.00 25.41 27.95 19 KILAZAFERGARH Jind Julana 16.50 23.00 25.76 26.33 20 Simla kthl Kalayat 18.25 19.20 21.12 25.59 21 KHATKAR Jind SU SD No-1, Jind 17.25 23.75 25.07 25.26 22 Uchana Kalan Jind Uchana 14.00 17.21 22.39 24.04 23 Thua Jind Naguran 17.00 19.73 21.58 22.96 24 Matour kthl Kalayat 16.91 17.99 18.52 22.43 25 JHANJ KALAN Jind SU SD No-1, Jind 17.25 18.44 19.77 22.35 26 Naguran Jind Naguran 20.02 21.22 33.59 22.13 27 Balu kthl Kalayat 17.75 19.22 28.56 22.13 28 Peggan Jind Naguran 18.90 20.49 21.20 21.81 29 ROOPGARH Jind SU SD No-1, Jind 14.67 18.46 19.94 21.69 30 SANGATPURA Jind SU SD No-1, Jind 15.00 18.23 19.86 21.58 31 Petwar Hsr Narnaund 13.50 16.57 17.99 20.26 32 Nindana Rtk Meham 12.50 15.58 15.25 20.17 33 Ghogrian Jind Uchana 11.00 17.81 18.11 20.05 34 JAJWAN Jind SU SD No-1, Jind 12.50 15.38 17.40 19.04 35 Chhatar Jind Uchana 10.00 13.01 14.13 18.76 36 Shahpur Jind Naguran 15.84 17.53 17.54 18.71 37 Narwana Jind Narwana 8.50 11.00 15.05 18.51 38 INTAL KHURD Jind SU SD No-1, Jind 11.50 14.78 15.70 18.11
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Sr. Villages Circle SDO Def. amt. Def. amt. of Def. amt. Def. amt. No of Jul-15 Sep-16 in of Sep- 17 of Mar- in Crore Crore in Crore 18 in Crore 39 Karsindhu Jind Uchana 8.25 10.32 14.27 17.97 40 Madanheri Hsr Mundhal 11.00 14.41 11.74 17.82 41 Bahu Akbarpur Rtk SU SD Rtk 17.75 15.26 16.51 17.68 42 Gulkani Jind SU SD No-1, Jind 12.00 15.39 16.69 17.24 43 Farmana Rtk Meham 11.25 15.08 16.60 17.19 44 Dinod Bwn Tohsam No-2 8.71 11.60 6.85 16.72 45 Rakhi Hsr Narnaund 20.00 14.82 15.97 16.51 46 Barsola Jind SU SD No-1, Jind 11.00 12.85 14.51 16.29 47 Dubaldhan jhjr Beri 10.25 14.15 15.98 15.42 48 Mundhal Hsr Mundhal 10.75 14.43 11.97 15.41 49 Kanhari ftbd City Tohana 12.50 13.32 14.51 15.40 50 Gatoli Jind Julana 8.50 12.09 14.24 15.39 51 Kharanthi Rtk SU SD Rtk 15.50 15.46 15.48 15.34 52 Kheri jalab Hsr Narnaund 9.00 12.93 12.86 15.04 53 Samain ftbd City Tohana 14.00 13.04 13.04 14.87 54 Uchana Khurd Jind Uchana 8.75 11.01 12.92 14.53 55 Matanhail jhjr Matenhail 10.00 11.89 12.13 14.49 56 DARIAWALA Jind SU SD No-1, Jind 9.25 11.78 13.13 14.41 57 Sunariyan rtk SU SD Rtk 14.50 14.49 14.20 14.30 58 Deorar Jind Julana 8.11 11.37 13.05 14.25 59 Batta Kthl Kalayat 10.31 11.00 11.42 14.05 60 Kharkara Rtk Meham 9.50 11.10 12.31 13.71 61 Ujhana Jind Garhi 11.50 13.70 12.42 13.27 62 Kailram kthl Kalayat 5.78 7.57 9.83 13.05 63 Baroda Jind Uchana 8.55 10.82 12.15 12.71 64 Bhatla Hsr Hansi 11.75 12.66 14.77 12.48 65 Balyali Bwn Tohsam No-2 10.68 10.67 6.07 11.71 66 Barodi Jind SU SD No-1, Jind 9.50 9.55 10.33 11.36 67 Dalamwala Jind Naguran 6.00 9.47 10.65 11.27 68 Palwan Jind Uchana 7.00 8.87 10.23 11.18 69 Dahola Jind Naguran 10.01 11.00 10.11 11.14 70 Gamra Hsr Narnaund 7.00 8.58 9.82 10.90 71 Kinner Hsr Narnaund 7.00 9.45 9.90 10.87 S/U No.2 72 Tigrana Bwn Bhiwani 6.95 4.90 2.45 10.81 73 Igrah Jind SD No-2 31.00 10.70 10.71 10.64 74 Kolekhan kthl Kalayat 10.00 8.89 9.98 10.46 75 Khidwali rtk Jassia 11.19 13.52 10.63 10.46 76 Bapora Bwn Tohsam No-2 10.44 12.98 6.09 10.30 77 Chousala kthl Kalayat 8.00 8.45 9.35 10.24 78 Rai Chandwala Jind Naguran 7.01 8.40 9.04 9.95 79 Behbalpur Jind SD No-2 9.50 9.32 9.87 9.92
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Sr. Villages Circle SDO Def. amt. Def. amt. of Def. amt. Def. amt. No of Jul-15 Sep-16 in of Sep- 17 of Mar- in Crore Crore in Crore 18 in Crore 80 Khanak Bwn Tohsam No-2 2.00 8.63 4.82 9.85 81 Dhanana Bwn Bawani Khera 12.00 10.68 12.00 9.79 82 Kharkramji Jind SD No-2 11.00 10.29 10.31 9.69 83 Singhwa Hsr Mundhal 3.70 4.41 6.72 9.43 84 Data Hsr Hansi 6.00 7.16 8.25 9.26 85 Kithana Kthl Rajound 7.00 6.35 7.00 9.17 86 Nirjan Jind SU SD No-1, Jind 6.50 7.93 8.48 9.07 87 Kakrod Jind Uchana 6.75 8.56 9.06 9.06 88 Badsikri Kthl Kalayat 7.38 7.75 8.18 9.02 89 Dhanda Kheri Jind SU SD No-1, Jind 5.50 7.20 7.67 8.98 90 Kairru Bwn Jui 8.08 8.46 8.75 8.82 91 Ramkali Jind Julana 5.00 7.55 8.32 8.76 92 Sedda Majra Jind Uchana 10.25 11.89 12.77 8.75 93 Chiri rtk SU SD rtk 8.75 8.67 8.78 8.67 94 Bhaklana Hsr Mundhal 5.50 6.09 8.62 8.62 95 Bhaini Amirpur Hsr Narnaund 5.50 8.12 7.70 8.61 96 Jalalpur Kalan Jind SU SD No-1, Jind 6.00 7.77 8.05 8.52 97 Padana Jind SD No-2 9.00 8.80 9.12 8.49 98 Ratera Bwn Tohsam No-2 4.31 7.99 8.35 8.48 99 Badhana Jind Naguran 5.20 7.04 7.84 8.45 S/U No.2 100 Bamla Bwn Bhiwani 3.79 5.69 6.75 8.44 101 Kharar Hsr Hansi 6.00 7.35 8.23 8.34 102 Intal Kalan Jind SU SD No-1, Jind 6.00 7.02 7.29 8.32 103 Dhanauri Jind Garhi 11.25 7.19 9.81 8.15 104 Nidana Jind SD No-2 6.50 7.13 7.93 8.14 105 Ritoli rtk SU SD Rtk 8.25 8.12 8.14 8.12 106 Kurar kthl Kalayat 7.75 7.33 7.64 7.95 107 Nidani Jind SD No-2 6.50 7.99 7.63 7.84 108 Ramgarh kthl Kalayat 7.50 7.61 7.21 7.81 109 Khedar Hsr Barwala 2.00 2.85 6.32 7.75 110 Bajina Bwn Tosham No-1 6.30 8.84 4.78 7.74 111 Badhara Bwn Badhra 5.89 8.24 8.55 7.68 112 Jui Kalan Bwn Jui 1.25 3.54 5.22 7.62 S/U No.2 113 Devsar Bwn Bhiwani 3.37 5.63 6.52 7.57 114 Dhankari Jind Naguran 5.00 6.45 7.13 7.54 115 dharam Kheri Hsr Narnaund 5.50 6.81 7.43 7.50 116 Bhongra Jind Uchana 8.00 9.30 9.30 7.46 117 Malvi Jind Julana 3.90 6.30 6.60 7.42 118 Urlana Kalan Pnpt Madlauda 1.75 1.79 1.99 7.40 119 DURJANPUR Jind Uchana 7.00 7.33 7.35 7.35 120 Umra Hsr Umra 7.00 7.16 7.25 7.33
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Sr. Villages Circle SDO Def. amt. Def. amt. of Def. amt. Def. amt. No of Jul-15 Sep-16 in of Sep- 17 of Mar- in Crore Crore in Crore 18 in Crore 121 Bhusla Jind Uchana 6.50 7.91 7.26 7.27 122 Pabra Hsr Barwala 3.23 4.89 5.80 7.21 123 Karsola Jind Julana 4.00 6.66 7.38 7.16 124 Kharnthi Jind Julana 4.25 6.59 7.05 7.01 125 Karora Kthl S/D No-1, Pundri 2.00 1.96 7.00 7.00 126 Rajthal Hsr Narnaund 4.50 6.09 5.77 6.93 127 Jhanj Khurd Jind SU SD No-1, Jind 5.76 5.32 5.88 6.82 128 Pindara Jind SD No-2 5.00 7.10 6.37 6.82 129 Nara Hsr Narnaund 4.50 5.67 6.40 6.81 130 Jui Kalan bwn Jui 1.25 2.75 4.76 6.70 S/U No.2 131 Chang Bwn Bhiwani 5.85 8.96 7.77 6.70 132 Mandi Khurd Jind Naguran 1.00 1.84 6.56 133 Kharak Pandwa kthl Kalayat 6.00 6.28 6.14 6.53 134 Buwana Jind SD No-2 6.50 6.50 6.97 6.39 135 Kanwari bwn Tohsam No-2 3.41 5.90 6.01 6.39 136 Budain Jind Uchana 5.00 5.05 6.28 6.35 137 Mandi Jind Naguran 5.10 5.85 5.40 6.56 138 Julani Jind SU SD No-1, Jind 4.25 5.03 5.84 6.31 139 Dundwa kthl Kalayat 5.66 5.60 6.13 6.30 140 Jui Khurd Bwn Jui 2.00 4.52 6.32 6.30 141 Ahirka Jind SU SD No-1, Jind 4.25 4.96 5.49 6.29 142 Kaul kthl Dhand 5.50 5.85 5.84 6.28 143 Hathwala Jind Julana 3.91 6.16 6.44 6.22 144 Jadola/ Jajanpur kthl Dhand 1.00 1.04 4.05 6.19 145 Barahana Rtk Sampla 7.50 6.41 6.32 6.12 146 Pai Kthl S/D No-1, Pundri 8.00 5.32 6.09 6.09 147 Daroli Khera Jind Uchana 5.50 6.04 6.06 6.06 148 Kabulpur Rtk SU SD Rtk 6.00 7.05 6.50 6.05 149 Bhagana Hsr Umra 6.00 6.14 6.10 6.04 150 Jui Khurd bwn Jui 2.00 4.66 5.40 6.03 151 Songal Kthl Rajound 5.75 3.61 4.26 5.92 152 City M/Garh Nnl City SD M/garh 5.00 5.50 5.92 153 Sui Bwn Tohsam No-2 3.75 5.92 3.12 5.84 154 Muzadpur Bwn Tohsam No-2 3.38 5.17 2.81 5.81 155 Shamdo Jind Naguran 4.87 6.30 5.08 5.78 156 Tosham Bwn Tosham No-1 10.64 10.95 10.64 5.71 157 Karela Jind Julana 3.23 5.31 5.51 5.67 158 Mandi Kalan Jind Uchana 5.12 5.65 5.64 5.65 159 Dhigana/ Bhigana Jind SD No-2 3.50 4.19 4.32 5.58 160 Milakpur Hsr Hansi 2.75 4.05 4.70 5.43 161 Sahlawas jhjr Sahlawas 6.50 7.30 6.35 5.41
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Sr. Villages Circle SDO Def. amt. Def. amt. of Def. amt. Def. amt. No of Jul-15 Sep-16 in of Sep- 17 of Mar- in Crore Crore in Crore 18 in Crore 162 Lodhar Jind Uchana 3.75 4.36 4.36 5.36 163 Rajound kthl Rajound 0.08 2.95 5.32 164 Dilluwala Jind Naguran 3.55 4.34 5.01 5.31 165 Khanda Jind Naguran 2.96 4.10 4.37 5.28 166 Pabnawa Kthl Dhand 5.50 5.59 5.30 5.28 167 Danoda Kalan Jind SU SD Narwana 5.38 5.03 5.14 5.25 168 Radhana Jind SD No-2 6.50 5.85 5.74 5.13 169 Ajaib Rtk Meham 4.00 3.07 4.88 5.10 170 SANGHI Rtk Jassia 5.14 5.60 5.11 5.08 171 Sultanpur Hsr Umra 5.00 5.29 5.15 5.07 172 Alampur Bwn Tosham No-1 6.31 6.46 4.12 5.06 173 Dhakal Jind SU SD Narwana 5.15 5.55 5.08 5.05 174 Jui (B) Bwn Jui 1.25 3.01 4.35 5.04 175 Jui Bichali bwn Jui 1.25 3.01 4.15 5.04 176 Sandeel Jind Naguran 2.59 3.59 4.50 5.02 Total 1794.34 2113.43 2244.71 2450.35
From the above table we can conclude that no efforts have been done for the recovery of the defaulting amount. If the defaulting amount of 176 villages is recovered, then one third amount is recovered. If more efforts are done on the recovery of the defaulting amount of 718 villages then 46% of the defaulting amount can be recovered whose total is 3600.97 Cr.
The extra financial burden of discoms is managed through loans. If we assume interest rate at 12% annual, then the total amount of interest of the loan against the defaulting amount of Rs. 7820.28 cr. is Rs.938.43 Cr. per year.
It has been observed that defaulting amount of arrears against various categories of consumers was accumulating / increasing every year. Therefore the claim of the Govt. and the management of discoms to recover the arrears are totally futile and false.
If the defaulting amount is recovered, the Rs.938.43 Cr of interest can be saved. A relief of 25 paise per unit in tariff should be given to the consumers. Ultimately sufferers of this heavy defaulting amount are poor, helpless and honest consumers who are paying the enormous and unbearable bills regularly. The discoms have adopted the easy way to get loans to make up for this defaulting
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In the UDAY scheme the Haryana Govt. signed a Tripartite Memorandum of Understanding on 11th March, 2016 with Ministry of Power Govt. of India and Haryana Distribution companies that "all outstanding dues from the State Govt. departments to Discoms for supply of electricity shall be paid by 31st March, 2016. After more than 28 months where does the Haryana Govt. stand in case of this clause? Why the poor consumers should suffer due to the violation of agreement by Haryana Govt. itself. The HERC should penalize the Govt. for this.
Even the defaulting amount against the Govt. has also increased from 15 June, 2015 to May 2018. Now, the total defaulting amount against Govt. is Rs.813.43 Cr. which was Rs.633.53 Cr. three years earlier. Why this amount cannot be charged from the Govt. Govt. is enjoying at the cost of poor consumers. Even the number of defaulters which were 2164317 in 2015 is now 2241720. This type of laxity of discoms caused additional burden on the innocent electricity consumers of the State and is against the natural law of justice. Why the defaulters are still enjoying free electricity on the cost of the honest consumers?
Fixed charges:
The DH has earned Rs.1136.03 Cr. as fixed charges in FY 2017-18 and it would earn Rs.1226.85 Cr in FY 2018-19 which are over and above of the tariff paid by the consumers for the energy consumed by them. This is not justified when the consumers are paying for the consumption of electricity out of their prior approved load. The HERC should not allow this amount. Then the consumers will have a benefit of reduction of 56.73 paise per unit in tariff. (Total power sales estimates of 2018-19 being 21623.39 MUs)
The Impact of Hon'ble CERC Order:
The Hon'ble CERC through its various judgments' has allowed certain generators like Adani Power etc. recoveries on account of change in law etc. The licensee has already made payment of Rs.1508.14 Cr and has been included already in the power purchase cost of FY 2017-18. In DH the monthly impact based on the bills of Adani Power on account of above works out to 52 paise per unit,
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 accordingly the licensee has increased the per unit cost of power purchase for the purpose of estimation of cost of power purchase from Adani Power in FY 2017-18 and FY 2018-19.
But in case of UH, the monthly impact based on the bills of Adani Power on account of above works out to 13 paise per unit, accordingly the licensee has increase the per unit cost of power purchase for the purpose of estimation of cost of power purchase from Adani Power in FY 2017-18 and FY 2018-19.
Why the monthly impact per unit is different in two discoms? The power is purchased for the State i.e. for both DH and UH collectively. I cannot understand that the impact per unit can be 4 times more in one company than that of the other company.
The Salient features of the UDAY scheme were:
It was agreed by the State Govt. that it shall clear all the outstanding dues of RE subsidy and Equity and FSA.
The total amount of equity support required for capital expenditure would be provided by the State Govt. I would like to know here the total amount of equity support provided by the GOH in FY 2016-17, FY 2017-18 and FY 2018-19?
Nothing has been said about the clearance of these dues in the ARR.
Similarly, regarding replacement of Street light with LEDs in all municipal towns through Nagar Nigam/ Municipal Corporations, no information has been provided in the ARR.
The State Govt. was duty bound to improve the efficiency of the State generating units. But instead of improving efficiency of State generating units these are forwarding to the worst.
What has been done regarding the clause of comprehensive proposals for restricting of Discoms.
What is the position of the agreement that the Discoms shall eliminate the gap between ACS and ARR.?
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Non-Tariff income:
Non-Tariff income as against that of Actuals of 2016-17 is just increase of 15 Cr. which is a negligible increase. On the one hand it is said that- Non Tariff Income comprises of delayed payment charges from the consumers and recovery of theft of power. But at the same time, according to UH in its true-up FY 2016-17, the revenue received on account of delayed payment surcharges is not income of the Nigam, rather it is a carrying cost recovered from consumers to pay the interest on the increased portion of working capital which occur because of delay in receiving the revenue. Request has been made by UH that the revenue from delayed payment surcharge should not be considered as income of the Nigam.
The Nigam submits that delayed payment surcharge is collected against the receivables from the consumers that are not received in time. How can Nigam compare the surcharge with carrying cost? Surcharge on one year delayed payment comes out to be 44% whereas the carrying cost is not more that 12%.
Interest on Capex Loan to be raised for the ensuring Control Period:
Rs.1100 Cr capex loan for FY 2017-18 and Rs. 1300 Cr. For FY 2018-19 approved. Estimated loans would be serviced at the rate of 11.50% per year. The rate of interest is very high as compared to available rates in the market. It cannot be tolerated even often UDAY. This should not be approved.
The Discoms has requested the HERC to consider the interest of UDAY bonds and loan considered under UDAY other loan as the interest of the same is borne by the licensee. It would request the Hon'ble commission not to allow this, if allowed, the purpose of UDAY fails. The maximum loans must be availed from PFC, PFEL (R-APDRP) JICA loan etc. which are available on less rates of interest. Even certain commercial banks can also grant loans on lower rates of interest in the competitive borrowing. Electrification schemes one also available.
It was agreed up in UDAY scheme that the rate of interest of 25% loan would be available at 9.80% i.e. Bank rate of loan bank (OBC). Then why the Discoms are paying interest rate at 11.50%
Distribution Losses:
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The commission itself observed that 788 (21.55%) feeders of UH and 526 (12.87%) feeders of DH were having losses above 50% which were increasing as compared to last year of 953 of UH and 506 feeder of DH. The Hon'ble Commission in its order on tariff dated 07th May, 2015 directed the Discoms to bring down the number of rural feeders with above 50% losses by 50% at the end of FY 2015-16 and no urban feeders with above 25% line losses shall exist by the next ARR/ APR filing. A failure to comply with the targets set by the commission shall attract penal action under Section-142 of the Electricity Act, 2003 against the XEN and above of the area concerned.
Section142. (Punishment for non-compliance of directions by Appropriate Commission):
"In case any complaint is filed before the Appropriate Commission by any person or if that Commission is satisfied that any person has contravened any of the provisions of this Act or the rules or regulations made thereunder, or any direction issued by the Commission, the Appropriate Commission may after giving such person an opportunity of being heard in the matter, by order in writing, direct that, without prejudice to any other penalty to which he may be liable under this Act, such person shall pay, by way of penalty, which shall not exceed one lakh rupees for each contravention and in case of a continuing failure with an additional penalty which may extend to six thousand rupees for everyday during which the failure continues after contravention of the first such direction."
Unfortunately, to my information, the Discoms took no serious notice of the strict direction of the commission as usual. Still I would like to know from the Hon'ble Commission the action taken for noncompliance of the direction of the commission against the Discoms?
The Hon'ble commission in its tariff order on 11 July, 2017 again directed the distribution licensees to file, within 3 months detailed reasons for not achieving the target determined by the commission in its tariff order dated 07.05.2015. The commission also directed the Discoms to bring down the total number of rural feeders with line losses above 50% as on 31.03.2017 to half and to bring down the losses of all urban feeders below 25% by the time of next ARR/ APR filing.
Discoms were further directed to file report on the Status of losses on each of these feeders and also prominently display them on their website.I would like to say
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Poor consumers are always be penalized financially and punitive actions are also being taken against them for minor violation. HERC orders should be bindings and mandatory on both the parties i.e. Discoms and the consumers. The honest consumers are paying their tariff regularly and if any consumer fails to pay then he is penalized. Here, I want to say that whether at any step or time the Discoms have been financial penalized.
At some occasions the Hon'ble Commission, if disallowed anything that had always cascading effects on the consumers. When deficit in revenue requirement (ARR) was bridged through the creation of regulatory assets/acknowledgments for uncovered revenue gap rather than tariff increase, the borrowings against this regulatory asset/ gap further increased the debt serving cost which was ultimately recovered from the consumers on one or other reasons.
If sometimes the HERC could not allow the demanded Agricultural sales, the Discoms loaded these sales in the next ARR or got loan against the sales. Ultimately this gap amount always badly affected the consumers. This is a vicious circle run by the Discoms.If the HERC did not allow any tariff increase then the Discoms on the pretext of disallowance by the commission always blamed the HERC order for the financial distress of the Discoms.
Similarly, the Discoms also blamed the commission for their increasing gaps significant disallowance of costs by HERC in ARR orders (only 33% of interest and Finance charges allowed by commission during 2011-12 to 2013-14) was also shown as the reasons that had led to the poor financial position.I would request the Hon'ble Commission to take a serious notice of this type of non- functioning of the Discoms to save the consumer from the clutches of their ugly hands.
I would request the Hon'ble commission to let us know the latest status of these directions and what type of action is being taken against the erring officers. Due to unreasonable distribution loss level in both Discoms, the cost of service has increased significantly and it would be extremely difficult for the Discoms to remain financially viable unless immediate effective steps are taken to control the same.
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Every time the Discoms make commitment of improving their efficiency but at the time of filing the Discoms present a grim picture of the losses. Measures of loss reduction were to be taken by Discoms in UDAY commitment mainly.
Achieving 100% Distribution Transformer (DT) metering by 30 June, 2017; to my knowledge only in some big cities where there exist RAPDRP, this has been done, but in more than 50% urban areas, it has not been done.
Installation of smart meters for all consumers other than AP consumers by 31st December, 2017;
Implementing ERP for better and effective inventory management, personnel management, accounts management, etc. to reduce costs and increase efficiencies by March, 2018;
All meters will be brought out from the residential premises and affixed outside the houses; this exercise would have been completed in all urban areas by 31st March, 2017;
A policy of losses linked supply hours would have been prepared and followed in those feeders in which losses continue to be very high, their supply hours would have been reduced in accordance with the policy;
I would like to know the actual position of all these above measures taken and the result now thereof;
In respect of rural areas, the Mhara Gaon Jagmag Gaon scheme will be extended to 1250 feeders by 2017-18 and; remaining feeders by 2018-19. Whether in any village where the defaulting amount is in between Rs.5 cr. to 79 Cr. is pending or in any village where losses were more than 70%, this policy have been implemented. The real impact would have been in these types of villages where the consumers are consuming power ruthlessly without paying any penny whether these are connected or disconnected.
A committee for overseeing the performance of Discoms headed by Chief Secretary will be constituted with ACS power, ACS finance and two senior officers having experience in the power sector as members;
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Whether the committee has been constituted, if yes, whether the committee is meeting at least once in two months? If yes, the proceedings were required to be loaded on the website of the Discoms or power department;
The power department will submit a quarterly report to the council of ministers on the status of implementation of UDAY and other related issues;
Certainly a very attractive draft was shown exceeding even all kinds of dreams which was to be implemented in lieu of people of the state were to own the responsibility of taking liability of Rs. 25950 cr. losses of the Discoms.
Return of Equity:
The Discoms have demanded return on equity Rs 406.91 Cr and Rs 511.13 Cr for FY 2017-18 and FY 2018-19 resp. which should be turned down.
Revenue Gap:
Rs. 2502.34 Cr. of Revenue gap on APR 2017-18 has been demanded by DH. The commission while in its order on 11 July 2017 approved the gap of only Rs. 1011.57 cr. at current tariff. This is two and half times more. So there is no rational reason to approve this. It should be disallowed out rightly.
Similarly in FY 2018-19 ARR, the Discoms is demanding again Rs 1849.85 Cr which would have been neutralized after the three years of Discoms implementation of UDAY scheme. There was a commitment by the Discoms in UDAY that Discoms shall eliminate the gap between aggregate cost of supply and Aggregate Revenue Requirement.
The total gap of True-up for FY 2016-17, the gap of APR for FY 2017-18 and ARR for 2018-19, would amount to Rs. 6392.42 which can never be met out of the tariff collection. The Hon'ble commission should disallow this gap. The Discoms can use their fixed assets nothing more should be allowed.
Bad and Doubtful Debts:
The Discoms are trying to make use of Section- 64 of the MYT Regulation 2012. Under which bad and doubtful debts shall be allowed to the extent the distribution licensee has actually written-off bad debts subject to a maximum of 0.5%
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FSA:
The Hon'ble Commission's order on FSA dated 03.03.2017 in case No HERC / PRO-33 of 2015 and PRO-35 of 2015 are still final. The additional FSA amount allowed by the Commission for 2014-15 and estimated FSA for the FY 2015-16 and for FY 2016-17 was taken into account. Resultantly, the FSA remaining unrecovered as on 31.03.2017, including holding cost has been estimated at RS 828.40 cr. by the Hon'ble Commission.
The commission determined the following rate of recovery of the FSA in its final order.
FSA rate of recovery per unit of sale is to be 65 paisa upto 30.06.2017.
Recovery at the end of June, 2017 was to be Rs. 426.59 Cr. Thus balance unrecovered amount as on 30.06.2017 was to be Rs. 401.81 cr.
The Hon'ble commission decided that FSA @ 37 paisa per unit would continue from 1St July, 2017. The total unrecovered amount could be recovered at the end of November, 2017 because the estimated sales would be estimated as 10938.13 MU. The final order of the commission was that the recovery of FSA shall continue @ 37 paise per unit till the total amount as determined in the order is fully recovered. So, after 30 Nov. 2017, the FSA should have been stopped. Unfortunately the Discoms have been charging FSA at the same @ 37 paise per unit even after 30th Nov. 2017. No reason has been given by the Discoms to continue the same FSA even after the recovery of the total amount of FSA. So, I would request the Hon'ble Commission to order finish this menace of FSA for all the time to come. The amount recovered by the Discoms of FSA @37 paisa per unit since 1st December, 2017 may be refunded to the consumers.
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The Hon'ble Commission also ordered the Discoms that they shall also post the details in their websites. This shall also include any FSA that are being recovered under 'automatic route' as per MYT Regulations in vogue before issuing any sales circular on FSA.
The Discoms never came out with the FSA collection on AP sales from the Government. The details of FSA on AP recovered must be revealed to the consumers. The commission directed the power discoms in its order on 03.03.2017 to file details of subsidy received by them in each year. On the above FSAs from the State Govt. within three months from the issue of this order. We have no knowledge about the compliance of this directive. I would request the Hon'ble Commission to order the end of this never ending misery of FSA which is being charged even half the recovery of additional amount spent. Otherwise the helpless consumers are at the mercy of the monopoly of the Discoms in case of FSA. Once the FSA is imposed, it has never been stopped. Even holding cost of additional amount is also being charged from the consumer without their fault. HERC order should be binding and mandatory for both the parties
AP Subsidy for the FY 2017-18 & FY 2018-19:
Both the Discoms have demanded Rs. 6550.86 Cr. & Rs. 6878.40 Cr. for the FY 2017-18 & 2018-19 as RE subsidy against AP sales, the Discoms have shown the estimated AP sales as 9556.72 MU units and 10034.56 MU units for the agriculture sector for FY 2017-18 and FY 2018-19 respectively.
In our neighboring state Punjab the agriculture sale must be double from Haryana because they have number of tube wells two times more then we have. But the Punjab State Electricity Regulatory Commission has allowed only Rs. 5976.82 Cr. as subsidy on account of Agriculture Supply for FY 2017-18. More over losses in AP power supply have been calculated @ 16 percent losses which cannot be less than 30 percent. So I would request the Hon'ble Commission to disapprove the RE subsidy demanded by the Discoms for the agriculture supply. We still collect more than Rs. 100 cr. rupees on account of AP sales but the Punjab agriculture supply is free of cost.
Interest on Consumer Security Deposit:
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The UH has claimed Rs. 85.24 cr. as interest on consumer security deposit and DH has also claimed Rs. 76.87 cr. for the FY 2018-19. The total amount would be Rs. 162.11 cr. But to my surprise there is no description in the Electricity Bill issued to the consumer regarding the interest returned to him against his security. So I want to know from the Discoms where this amount collected as interest on consumer security deposit is being adjusted every year.
Reply of DISCOMs
True up of FY 2016-17 UHBVN
1) POWER PURCHASE:
i) As per HERC MYT Regulations Power purchase price is an uncontrollable item. The normative power purchase quantum is also uncontrollable as the sales are also uncontrollable item and normative losses are used to gross up the sales and arrive at normative power purchase quantum. ii) Further the power purchase is from the sources approved by the HERC. iii) The cost is subject to the true up and FSA Regulations of the HERC.
Certain data as taken in the objections as per the details given below is apparently not correct:-
Power Purchase Approved Power Actual Power Remarks source Purchase cost Per unit Purchase cost in Rs. Per unit in Rs. Rihand I 2.58 2.27 Actual power purchase cost for RIHAND is Rs. 2.27/kwh SJVNL 2.25 3.64 Actual power purchase cost for SJVNL is Rs. 3.61/kwh Avg. PP Cost 3.77 4.54 Actual power Purchase cost/kwh excluding HVPN excluding HVPN charges approved by Charges approved HERC for the year is Rs. 4.27/kwh.
The reason for increase in power purchase cost for FY 2016-17 are given as under:- 1. The power purchase sources approved by the HERC are mainly Central Generating Stations (CGSs) whose tariff is determined by the CERC on which Nigam has no control.
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2. The tariff of the CGSs mainly comprises of two components i.e. capacity charge and energy charges. The capacity charges are the fixed cost to be borne on monthly basis in proportion to the allocated share in the plant based on the actual availability. Further, energy charges/fuel charges are to be borne based upon the scheduling of power as per the actual fuel cost linked with certain technical parameters. 3. The difference in the approved power purchase cost as taken in the objections raised viz a viz actual power purchase cost for FY2016-17 is mainly attributable to the increase in power purchase cost approved by the CERC in comparison to the indicative rates considered by HERC. And the DISCOMs have legitimate right to recover this expenditure from consumers. 2) Distribution losses:
UHBVNL has submitted that the objection to state that the Losses of Haryana DISCOMs are at same level from 2005-2006 to FY 2017-18 is not in order. The loss level of Haryana DISCOM’s in the year 2005-06 and that in 2017-18 are tabulated below:-
Year 2005-2006 2015-16 2016-17 2017-18 UHBVN 31.04 31.49 29.86 24.81 DHBVN 30.90 24.47 22.50 19.16 Further before the segregation of AP feeders, the sales to agriculture category was booked on the basis of running hours which lead to understatement of losses. Even the HERC had restated the distribution losses in its order on the ARR for FY 2012-2013.
The Haryana Discom have made substantial reduction in the AT&C loss reduction in the last two years as already submitted before the HERC & have achieved the UDAY target of AT&C losses during the FY 2017-18.
Regarding the losses of feeder level, the DISCOMs are continuously bringing the loss level to the minimum level by adopting loss reduction schemes and in the last two years the number of high loss feeders in both the Utilities has been reduced considerably as given in the table below.
DHBVN
Category FY Total No. Above 70%- 60%- 50%- 40%- 30%- 20%- Below of feeder 80% 80% 70% 60% 50% 40% 30% 20% RDS 2016-2017 889 112 191 163 96 107 80 92 48
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2017-2018 948 51 174 163 108 102 125 109 116 2016-2017 727 2 4 4 15 20 54 136 492 Urban 2017-2018 744 - 1 2 7 13 35 108 578
UHBVN
Category FY Total No. Above 70%- 60%- 50%- 40%- 30%- 20%- Below of feeder 80% 80% 70% 60% 50% 40% 30% 20% RDS 2016-2017 863 396 241 93 56 37 22 13 5 2017-2018 880 154 298 158 94 60 33 30 53 2016-2017 605 5 8 12 18 23 63 135 341 Urban 2017-2018 631 2 6 4 10 10 26 81 492
3) AT&C losses
UHBVNL has submitted that Haryana DISCOMs achieved AT&C loss trajectory prescribed under UDAY MoU signed with Govt. of India in March, 2016 and reduced the losses 9% in the last two years as per table below:-
Year 2015-16 2016-17 2017-18 UHBVN 34.17 30.71 25.46 DHBVN 26.45 21.45 16.63 Total DISCOMs 29.83 25.43 20.29
Considering core technical losses of 10%, the percentage reduction in commercial losses for UHBVN is 34.56% over a period of 2 years. In rural areas the line losses reduced from 79% in FY 2015-16 to 76% in FY 2016-17 and further to 67% in FY 2017-18.
In urban areas the line losses reduced from 28% in FY 2015-16 to 21% in FY 2016-17 and further to 15% in FY 2017-18
4) Comparison of T&D Losses:
The objection pertains to higher losses even after implementation of MGJG works on RDS feeders. The objection is not in order being based on old data.
An analysis of losses on MGJG feeders before its implementation and after implementation in DHBVN on 293 feeders shows distribution loss reduction of 10.11%.
In UHBVN the analysis of 251 feeders, the distribution loss reduction is 20.35%. Thus the MGJG scheme is successful in loss reduction.
5) O & M Expenses for FY 2016-17:
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UHBVNL has submitted that the major component of the employees cost is terminal benefits which are uncontrollable as per the HERC MYT Regulations. The other components are also uncontrollable as licensee is a government company and follows the pay scales and allowances on government pattern. However the employees cost is subject to true up as per the HERC MYT Regulations.
The objection is not in order as the total employee expenses of Rs. 538.35 Cr as approved by HERC FY 2016-17 has been compared with the actual figures of Basis Salary which is one component of employee expense . The total employee expense as per actual accounts works out to Rs 647.39 Cr (Reference: Note No 23 of the financial statements of accounts of UHBVNL).
As such increase in actual expenses than the amount approved by HERC to the tune of Rs. 109.04 Cr has been correctly considered in True Up filings.
Repair and Maintenance
The contention of the objector that expenses on repair & maintenance have decreased and as such, better maintenance cannot be hoped for, is not correct. The UHBVN has strengthened its distribution network in the past, which has led to reduced expenditure on repair & maintenance. UHBVN is committed to provide better services to its consumers by strengthening its distribution network further, utility request the HERC to maintain the R&M Exp to the extent of actual expenditure. Moreover, disallowance on repair & maintenance can never be in the benefits of consumers.
6) Additional interest cost on long term loans:
UHBVNL has submitted that As per MYT regulation 2012, the Hon’ble commission allows interest on capex loans which are used for expenditure incurred by the licensee on the scheme approved by the HERC. In the ARR 2016-17 the net interest on capex loans has been allowed to the tune of 57.35 Cr. The Interest cost is subject to TRUE up as per actual accounts. The source wise details for borrowing and interest cost have been filed with the HERC. The actual interest on capex loan of UHBVN of 2016-2017 is Rs 176.19 Cr and the same has only been demanded under True up as per MYT regulation.
7) Return on Equity:
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On Return on Equity, the contention of the objector is not in order the equity is taken as equity employed by the owner. Probably the objector is confusing equity with net worth. The earlier HERC regulations which have been repealed provided for a return on asset base / capital base but as per the current regulations the return in calculated on equity employed in the assets.
8) Interest on Working Capital & Borrowings:
The HERC allows interest on working capital loans on normative basis. An amount of Rs. 114 Cr was allowed in FY 2016-17. However the actual interest cost was on working capital loans works out to Rs. 1083.71 cr, which includes amount of Rs. 630.99 Cr against UDAY bonds agreed to be considered by the commission in true up. UHBVN has claimed differential amount of interest cost on working capital loans of Rs. 118.86 cr (232.59-113.73)
The audited annual accounts of DISCOMs are filed with the Registrar of Companies (RoC) and Regulator (HERC) regularly as per statutory compliances and are in Public domain.
9) Depreciation:
The depreciation on fixed assets has been charged on straight line method as per the rates notified by the HERC vide its notification no HERC/26/2014 dated 05.12.2012. Where rates of particular assets are not provided for in the notification, the same are taken as per the Companies Act. The depreciation is provided on the assets as per fixed assets register. Summary of Fixed Assets Register is available at Note No 2(a&b) forming part of financial statements. As such, claim of UHBVN duly backed by FAR is correct.
10) Non-Tariff Income:
The amount of delayed payment surcharge is proposed to be included in non tariff income in the true up for 2016-17 & and ARR filing for FY 2018-19 now since the licensee is claiming actual interest on working capital loans. It was not taken in the petition as the delayed payment surcharge is collected against the receivable amount from the consumers that are not received in time and the HERC was allowing the interest cost on working capital loans on normative basis only.
11) True up of RE subsidy:
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The true up of Rs 4.98 cr. has been claimed as per actual AP consumption and HERC methodology. Almost all the AP feeders in the State have been segregated and are separately metered for metering AP consumption. The approved loss level of 16 % for computation the subsidy match with the account of the utility. However the amount of subsidy may change as a result of allowance of additional cost by the HERC in the true up.
Further the Govt. provides AP subsidy to the State Power DISCOMs in advance on monthly basis from April/May onwards every year against budgetary support. The Govt. provided subsidy of Rs. 6608.86 Crs. in FY 2016-17.
12) ARR filing:
The DISCOMs have proposed to continue with the current levels of tariff. The revenue gap is proposed to be met through operational financing under UDAY.
The true up of Subsidy in table 13 at petition page No 31 is joint for UHBVN and DHBVN. As such the first line of the table to be read as for UHBVN Rs 632.67 & the 2 nd line is for DHBVN Rs. 363.34 crs. This is a typographical error and all others figures are correct However the figure of UHBVN is now revised to Rs. 557 cr.
The figure of Rs. 672 cr. and 168 cr. of holding cost thereon has been taken from the HERC order dated 01.08.2016 (Table 3.43). The holding cost on the final gap is for 2 years @ 11%.
B) True of 2016-2017-In case of DHBVN
1) Power Purchase:- Same reply as UHBVN as serial No A- 1.
2) Distribution Losses:- The distribution losses of DISCOM is continuously on decreasing trend as per table below hence the observations are not in order:
Year 2005-2006 2015-16 2016-17 2017-18 UHBVN 31.04 31.49 29.86 24.81 DHBVN 30.90 24.47 22.50 19.16
3) AT&C losses:- The UHBVN & DHBVN have reduced its AT&C losses as per the UDAY targets in FY 2016-17 and 2017-18 and reduced the AT&C and distribution losses considerable from 2005-2006 as tabled below:-
Year 2005-2006 2015-16 2016-17 2017-18 UHBVN 42.22 34.17 30.71 25.46
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Year 2005-2006 2015-16 2016-17 2017-18 DHBVN 34.24 26.45 21.39 16.63
4) O & M Expenses for FY 2016-17:-
The objection is not in order as the total employees expenses Rs. 629.03 Cr as approved by HERC FY 2016-17 has been compared with the actual figures of “Basis Salary’ only which is one component of employee expense besides others such as DA etc. The total employee expense as per audited accounts works out to be Rs 669.35 Cr and the same is correct as per table No 6 and 7 of DHBVN petition.
The difference of 49.70 crs. taken in table 7 at Page no 22 and 23 is correctly worked out. (i.e Rs 678.74 actual -629.03 approved by HERC).
Repair and Maintenance
The maintenance activities including preventive maintenance has been scaled up in DHBVN and the expenditure of FY 2017-18 on R&M is Rs 107Cr as against the approval of Hon’ble HERC for Rs. 114 Cr which is almost at the level of approved expenditure. This will improve the system reliability and reduce the disruption of the system
5) Additional interest cost on long term loans:- As per MYT regulation 2012 the Hon’ble commission allows interest on capital expenditure loans where the expenditure has been incurred by the license on the scheme approved by the HERC and the source wise details on borrowing and interest cost is filled with HERC. In the ARR 2016-17 the net interest on capex loans has been allowed to the tune of 81.89 Cr. The Interest cost is subject to TRUE up as per actual accounts. The actual interest is demanded under True up as per MYT regulation. The actual net interest on capex loan of DHBVN of 2016-2017 is Rs 94.6 Cr and the same has been demanded in True as per table 10 of page 26 of the filling as per approved regulation
6) Similarly, the DH has sought additional amount of interest on working capital & borrowings
The HERC allows interest on working capital on normative basis and accordingly 108 Cr in 2016-17 was approved. However the actual interest cost on working capital is Rs. 842.97 crs. which includes Rs 461.21 Cr on
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UDAY bonds agreed to be allowed by the commission in true up hence claimed accordingly.
7) Return of Equity: -
The objection is not in order as the equity is always to be taken as equity employed and the same is different from Net Worth. The equity employed and net worth are two different concepts and cannot be used interchangeably .The HERC regulation also provide for return of Equity. As such the suggestion for rejection of seeking approval of 14% RoE is not in order. Further the Haryana DISCOM’s are showing turn around in performance in line with UDAY as detailed in APR for FY 2017-18 and the HERC has also allowed RoE to DISCOMs in FY 2017-18.Thus the objection is not in order.
8) Depreciation: -
The depreciation on fixed assets has been charged on straight line method as per the rates notified by the HERC vide its notification no HERC/26/2014 dated 05.12.2012. Where rates of a particular assets are not provided for in the notification, the same are taken as per the Companies Act. The depreciation is provided on the assets as per fixed assets register. Summary of Fixed Assets Register is available at Notes on accounts forming part of financial statements. As such, claim of DHBVN duly backed by FAR is correct
The depreciation claimed is lower than that approved by HERC and claimed based on audited annual accounts including FAR hence the observation is not in order.
9) Non-Tariff Income: -
The amount of delayed payment surcharge is proposed to be included in non tariff income in true up of 2016-17 and ARR for 2018-19 now since the licensee is claiming actual interest on working capital loans. It was not taken in the petition as the delayed payment surcharge is collected against the receivable amount from the consumers that are not received in time and the HERC was allowing the interest cost on working capital loans on normative basis only.
10) True up of RE subsidy:
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The true up of Rs 4.98 cr. has been claimed as per actual AP consumption and HERC methodology. Almost all the AP feeders in the State have been segregated and are separately metered for metering AP consumption. The approved loss level of 16 % for computation the subsidy match with the account of the utility.
Further the Govt. provides AP subsidy to the State Power DISCOMs in advance on monthly basis from April/May onwards every year against budgetary support. The Govt. provided subsidy of Rs. 6608.86 crs. in FY 2016-17.
C) APR 2017-18 and ARR Filling:-
1) Capital Expenditure:
With reference to the observations regarding non utilization of approved CAPEX Plan for FY 2016-17. In this regard, it is submitted that CAPEX of Rs. 1200 Crores was approved by the Hon’ble commission in the ARR order dated 1.08.2016 for FY 2016-17. Initially, it was envisaged that the requisite approved expenditure shall be incurred on various works specified under UDAY and loss reduction related activities/schemes. However, the same could not materialize due to non finalization of tenders, thereby resulting into incurring less capital expenditure than that approved by the Commission. Considering these facts, DHBVN itself intimated to the Hon’ble Commission during the course of public hearing on APR petition for FY 2016-17 that the CAPEX for FY 2016-17 shall be to the tune of Rs. 637.94 Crores and accordingly Hon’ble Commission has approved the revised CAPEX plan as intimated by DHBVN. Against the revised CAPEX of Rs. 637.94 Crores , DHBVN has incurred an expenditure of Rs. 640.93 Crores.
Further, during the FY 2017-18, CAPEX of Rs. 1260 crores was proposed against which Hon’ble commission allowed Rs. 1100 crore and the same was also acknowledged by DHBVN in its APR petition as well. Expenditure of Rs. 808 crore was incurred against the allowed Capex of Rs. 1100 crore, i.e. a percentage of 73.45 towards Capex was achieved, thus negating the contention of the objector. (Expenditure of Rs. 200 crore proposed for Smart City
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Project in Gurugram could not be effected due to progressive initial stage/infancy activities.
However, Capex expenditure of Rs. 87.50 cores has already taken place upto 30.06.2018 in the current FY. During the remaining period of current FY, it is expected that the balance amount of proposed Capex shall be incurred on the various works as posed under CAPEX plan to Hon’ble Commission for FY 2018-19. It is worth mentioning here that all the tendering activities pertaining to the envisaged work have already been aligned and all out efforts shall be made to execute the work as per the targeted schedule.
2) Transmission and Distribution losses-
The progress of loss reduction in case of UHBVN is given in the table below:
Discom UDAY target Actual FY UDAY target of Actual FY UDAY target of Actual FY of FY 2015-16 2015-16 FY 2016-17 2016-17 FY 2017-18 2017-18
UHBVN 31.61% 34.17% 25.94% 30.71% 21.64% 25.46%
There is a reduction of about 9% in the last two years and the utility is striving to reduce the losses further in line with targets.
3) Discoms make RS.619 Cr profit of the losses for 14 years and the credit for turnaround goes to center's scheme.
The figures of combined AT&C losses of 2017-18 taken in the objection are incorrect and it is 20.29 as against the UDAY target of 20.04 and it is correct that DISCOM’s have booked net profit of Rs. 412 Cr in FY 2017-18
The ARR has been worked out as per the MYT regulation 2012 the figures of gap does not include FSA recovered from consumer which is accounted for in Annual accounts of DISCOM’s. The benefit in terms of reduction of FSA has already been passed on to the consumers and the current FSA levied is only 0.37 paise.
4) UDAY:
The interest liability has been taken over by Govt of Haryana and as a result the same has not been claimed in ARR of DISCOMs. The reduction in ARR is in the ultimate benefit of electricity consumers of the State.
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5) Surplus Power Purchase of DH:
The available surplus power in non peak hours and winter season is mainly banked and not sold. The percentage of banking of power out of total surplus is approx. 65%. Demand of power in the state of Haryana is in excess of availability of power in peak hours. To meet with the universal obligation of supply of power on demand, the DISCOM’s have to purchase the power to meet the peak demand. In non peak hours the power become surplus which is banked in the first instance and the remaining power in sold in the grid. One alternative is not to purchase the power but it will attract fixed charges which is levied on backing down of plants which is more than the loss on interstate sale of power. Thus the observation is not in order.
6) Improvement in recoveries of Bills:
The defaulting amount pertains to mainly rural domestic consumers. The amount is increasing due to levy of surcharge. The collection efficiency against current billing is almost 100%. However, the following steps are being taken:
The Panchayats are being taken into confidence to encourage people to pay their bills. Resolutions are being taken from Panchayats to pay bills in surcharge waiver schemes. Surcharge waiver schemes are being launched from time to time to incentivise the defaulters to pay their bills. Payments are being taken in instalments under MGJG and defaulters are encouraged to pay the bills accordingly. 7) Fixed charges:-
The tariff allowed by HERC is two part tariff which include Energy charges and fixed charges. The fixed charge is part of tariff and not over and above the tariff as raised in the observation. Hence the observation that the fixed charged is over and above the tariff is not in order.
8) The Impact of Hon'ble CERC Order:
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The payments made on account of change in law to particular Generator has been divided by the Units purchased from that particular generator in case of DHBVN whereas in case of UHBVN, the payments made on this account is divided by total units in case of UHBVN as shown in the filing. This is a difference in the depiction methodology but in the energy charges the correct position has been taken and as such there is no financial impact.
9) The Salient features of the UDAY scheme were:
The equity support from Govt of Haryana towards capex funding for year 2016-17, 2017-18 and 2018-19 is tabled below:-
Year 2015-16 2016-17 2017-18 2018-19 (Budgeted) UHBVN 38.70 144.26 78.10 77.80 DHBVN 51.65 139.22 69.34 86.04
Replacement of Street light with LED are to be done by urban local bodies and DISCOM’s are facilitating all consumer in procuring cheap LED from M/s EESL. Till now 73.24 lacs & 79.67 lacs Led lights have been sold under areas of DHBVN and UHBVN respectively.
Regarding ACS-ARR GAP in the accounts, the same has already been eliminated and the DISCOM’s are in profits. The restructuring of Staff is under active consideration.
10) Non-Tariff income:- This objection has already been replied in the objections on the true up for the FY 2016-17.
11) Interest on Capex Loan to be raised for the ensuing Control Period: -
The capital expenditure in the State DISCOM is mainly funded by REC and PFC which are specialized agency for funding of power projects. Loan/Grants for eligible projects are also availed from GOI, (IPDS, DDUGJY, RAPDRP projects) and external agencies like World Bank and JICA . The projects under IPDS, DDUGJY, JICA are already under implementation in Haryana DISCOMs. Under IPDS and DDU 60% of the project cost is allowed as grant component. The major CAPEX at present is under IPDS, DDUGJY and JICA schemes. The State DISCOM’s avails interest rebate for performance and presently 75 BPS (basis points) rebate is allowed on card rate of REC
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applicable interest rates to State DISCOMs. Further the interest on Capex loan is subject to true up as per actual accounts and any access/ short fall in the same is addressed in true up.
12) Distribution Losses:
DISCOM’S are continuously working to reduced the number of high loss feeders. A comparison/progress made in this regard is given in the table below:
DHBVN:
Category FY Total No. Above 70%- 60%- 50%- 40%- 30%- 20%- Below DHBVN of feeder 80% 80% 70% 60% 50% 40% 30% 20% RDS 2016- 2017 889 112 191 163 96 107 80 92 48 2017- 2018 948 51 174 163 108 102 125 109 116 2016- Urban 2017 727 2 4 4 15 20 54 136 492 2017- 2018 744 - 1 2 7 13 35 108 578 UHBVN
Category FY Total Above 70%- 60%- 50%- 40%- 30%- 20%- Below No. of 80% 80% 70% 60% 50% 40% 30% 20% feeder RDS 2016- 2017 863 396 241 93 56 37 22 13 5 2017- 2018 880 154 298 158 94 60 33 30 53 2016- Urban 2017 605 5 8 12 18 23 63 135 341 2017- 2018 631 2 6 4 10 10 26 81 492
13) Non compliance of Directives:-
Status of compliance of directives of HERC showing improvement in almost all the operational and financial parameter ending March 2018 has been filled with the commission and the same covers all the issues raised by the intervener here.
14) Revenue Gap:-
The ARR has been worked out as per the MYT regulation 2012. The figures of gap does not include FSA recovered from consumer which is accounted for in Annual accounts of DISCOM’s. The benefit in terms of reduction of FSA has already been passed on to the consumers and the current FSA levied @
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0.37 paise only. The revenue gap is proposed to be met through operational financing under UDAY.
15) Bad and Doubtful Debts:-
The Bad and Doubtful debts are part and parcel of business entities thus fillings are in accordance with MYT regulation-2012
16) FSA:-
The Discoms levy FSA on account of variation in power purchase cost during the relevant financial year in accordance with methodology approved by the Commission and the same is subject to true-up as per audited accounts. The MYT regulations direct the discoms to collect the FSA on quarterly basis. As per regulation FSA up to 10% of the approved cost of power purchase for the respective financial year is automatically passed to consumers on quarterly basis by discoms.
As per HERC orders of March-17, the Commission ordered that recovery of FSA shall continue at the rate determine i.e. 65 paisa/unit from 01.04.2017 to 30.04.2017 and @ 37 paisa per unit thereafter till the total amount determined in the order is fully recovered. The outstanding FSA determined in the order of March-17 was Rs. 828 crore expected to be recovered by October-17.
The FSA for the first two quarters of FY 2017-18 (Rs. 857 crs subject to true up) also become due and the same is being recovered at the same rate @ 37 paise/unit after the FSA of Rs. 828 crore is recovered, in line with the HERC regulations.
The compliance to the directions of Hon’ble Commission of FSA order dated 03.03.2017 has already been made and FSA petition for first two quarters of FY 2017-18 in line with HERC regulation has been uploaded on the website of the Discoms.
17) AP Subsidy for the FY 2017-18 & FY 2018-19:-
The subsidy has been claimed strictly in accordance MYT regulation -2012 it is not correct to compare the subsidy with the neighbouring states because of following:
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The amount of subsidy is cost of supply minus the actual amount paid by AP consumers to the licensee as per concessional tariff. Punjab has the lower power purchase cost due to availability of more Hydel power thus their power purchase cost is lower compared to Haryana 18) Interest on Consumer Security Deposit:-
The interest on consumer security is paid to the consumer in the month of April and May every year. The details of interest paid/provided as per audited annual accounts of Discoms is as follows:
Utility 2016-17 2017-18 UHBVN 71.71 73.74 DHBVN 18.63 52.33
Thus the interest is regularly paid in line with HERC regulations.
19) Relief Demanded
The Hon’ble commission may consider the reply of licensee UHBVN & DHBVN on the objections and relevant MYT Regulation while passing order on the ARR of DISCOMs.
Commission’ View
The Commission has considered the objections raised and reply thereon filed by DISCOMs and will be considered while passing the Order.
2.3.3 Objections filed by Jindal Stainless Steel through Sh. R. K. Jain 1) TRUE-UP OF EXPENSES FOR FY 2016-17: DHBVN has submitted its application for True-up of expenses for FY 2016-17. The application shows a large variation in all important performance statistics as compared to the parameters approved by the Hon’ble Commission. For ready reference some of the important parameters are given hereunder,
Parameter HERC ARR order HERC revised Actual by DHBVN Variation with approval revised Cost of power 10,703.68 11,300.79 *13,001.3 1,700.56 purchase 5 O&M Expenses 965.03 1,171.04 *1,239.76 68.72 Employees expenses 590.78 629.03 *669.34 40.31 R & M Cost 152.99 132.77 68.23 (-)64.54 Interest & Financing 568.76 216.52 *959.74 743.22
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Parameter HERC ARR order HERC revised Actual by DHBVN Variation with approval revised cost Depreciation 392.25 267.62 215.49 (-)52.53 ROE - - 281.17 Not allowed Net Annual Expenses 13,283.59 12,785.95 15,354.92 2,568.97 Total Income **24,261.69 14,991.57 including RE Subsidy Revenue Gap/Surplus **954.18 (363.34) CAPEX 561.37 1200.00 637.94
*Parameters which are controllable as per MYT Regulations.
**Combined for UHBVN & DHBVN
While reviewing the CAPEX Plan for the year 2016-17, Hon’ble Commission had observed as under,
“As such, in respect of DHBVNL, the Commission approves a overall capital expenditure plan of Rs. 1200/- Crores only. Both the licensees are directed that they shall regulate their capital expenditure plans for FY 2015-16 and FY 2016-17 as per Regulations 9.7 to 9.12 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012.”
Similarly while examining the trend of continuing distribution losses, Hon’ble Commission had observed as under,
“The distribution licensees are directed to file, within 3 months, detailed reasons for not achieving the targets determined by the Commission in its tariff Order dated 07.05.2015. The Commission also directs the distribution licensees to bring down the total number of rural feeders with line losses above 50% as on 31.03.2017 to half and to bring down the losses of all urban feeders below 25% by the time of next ARR/APR filing. The distribution licensees are further directed to file report on the status of losses on each of these feeders and also prominently display them on their website.”
Even while dealing with the AT&C Loss trajectory Hon’ble Commission had made the following observations,
“The distribution licensees are directed to explain the reason of under achievement even after re-fixing of their AT&C loss trajectory envisaged under UDAY scheme.”
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Another important observation made by the Hon’ble Commission was on the non-submission of Cost of Service by the Licensee,
“The Distribution licensees as stipulated under Regulation 57.1 (f) of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 and as per the directive in Commission’s Order on ARR of the two licensees for the control period FY 2014-15 to FY 2016-17 and also in Order on their Annual Performance Review Petition for FY 2014-15 have to submit the computation of supply voltage wise and consumer category wise distribution and AT&C losses. However, in compliance to above, the distribution licensees have submitted the voltage wise losses only. The Commission is of the considered view that a scientific methodology needs to be developed to calculate voltage wise and category wise losses so as the COS of respective category could be calculated precisely.”
“Accordingly, licensees are directed to finalize the methodology for Cost of supply (CoS) / voltage wise and category wise cost of services and submit the proposal to the Commission for its approval within three months from the date of issue of this Order.”
Our main observations on this part of the True-up Application of the licensee are as under,
a) There are large variations even on the controllable parameters, which should be disallowed. It would be recalled that every year such non-compliance of performance targets fixed by the Hon’ble Commission result in accumulation of losses of the Utilities which ultimately are to be made good from the corresponding tariff increase and ultimate financial burden to the electricity consumers. b) Reduced expenditure on Repair & Maintenance reflects directly on the failure of the Licensee to look after the required maintenance of the distribution system which results in poor quality of power supply to the consumers; c) The capital expenditure allowed to the Licensee should be linked with corresponding increase in revenue and quality of power supply otherwise it is an avoidable burden on the consumers. d) Due to non-furnishing of voltage-wise cost of service the Commission had to adopt the average CoS which resulted in
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determination of higher CSS for the HT Industrial category of consumers. e) The Commission disallowed any Return on Equity to the Licensee during FY 2015-16 and FY 2016-17. Observations made by Hon’ble Commission in the ARR order of FY 2015-16 dated 07.05.2015 is relevant, which read as follows, Return on Equity
UHBVNL and DHBVNL have proposed true up of return on equity for the FY 2013-14 amounting to Rs. 228.24 crores and Rs. 201.48 crores respectively. The true up has to be necessarily based on the principles of approved ARR and the relevant regulations. Hence, no return on equity can considered as part of the true up process in accordance with the ARR and Tariff Order for the FY 2013-14. f) It is disheartening that against a revenue surplus of Rs. 954.18 Crore projected by the Hon’ble Commission for both the Discoms during FY 2016-17, DHBVN alone has reported a net revenue gap of Rs. 363.34 Crore. Due to the inefficient working of the Discoms the consumers are unnecessarily burdened by way of enhanced tariffs.
The Utility has approached the Hon’ble Commission to allow a consolidated true up of Rs.2240.15 Crore, which is nothing but an attempt to camouflage the inefficiency by the Utility and seek relaxations over the figures approved by the Hon’ble Commission. It needs to be appreciated that if such relaxations are to be allowed, then the very purpose of the detailed exercise of approving ARR and other performance parameters becomes in-fructuous. Ultimately the consumers have to bear the difference by way of successive tariff increase. Moreover, these figures do indicate the lack of seriousness of the licensee to achieve the fixed parameters.
II. ANNUAL PERFORMANCE REVIEW OF 2017-18: DHBVN has submitted its application for Annual Performance Review for FY 2017-18. The application shows a large variation in all important performance statistics as compared to the parameters approved by the
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Hon’ble Commission. For ready reference some of the important parameters are given hereunder,
Parameter (All figures in Rs. Approved by Revised Variation Crore) HERC by DHBVN Cost of power purchase 11,925.87 *13,841.4 1,915.60 7 O&M Expenses 1,367.00 *1,399.16 32.16 Employees expenses 790.12 *884.90 94.78 R & M Cost 114.16 129.60 15.44 Interest & Financing cost 340.99 *406.23 65.24 Depreciation 288.87 299.06 10.19 ROE 173.16 406.91 233.75 Net Annual Expenses 13,851.42 16,641.5 2,790.09 1 Total ARR for UHBVN & **26,166.22 DHBVN Total Income for UHBVN & **25,154.65 11,518.7 DHBVN 5 Revenue Gap **1,011.57 2,502.42 CAPEX 1,100.00 1,100.00 *Parameters which are controllable as per MYT Regulations.
** Figures for UHBVN & DHBVN combined.
The Utility has approached the Hon’ble Commission to allow a revised ARR of Rs.16,641.51 Crore against the earlier approved figure of Rs.13,851.42 Crore which is upward revision of 20% just after 6 months of the HERC order.
The observations made on the True-up of ARR for FY 2016-17 also apply to the revised ARR for FY 2017-18, which may kindly be considered.
The licensee has reported a revenue gap of Rs.2,502.42 Crore for FY 2017-18 which is bound to result in increased financial burden to the consumers. This is inspite of the fact that Government of India had come up with UDAY Scheme under which large sums of accumulated losses of the Utilities were passed on to the State Government so that the financial health of the Distribution Utilities could be improved and the consumers are not unnecessarily burdened by way of increased tariffs. The continuation of such poor performance of the Utilities forfeits the very purpose of Government initiative.
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This is high time for the Distribution Utilities to improve their operational efficiency and reduce their expenses instead of adding to the burden of the consumers.
III. ANNUAL REVENUE REQUIREMENT FOR FY 2018-19: ARR as projected by the Licensee – highlights thereof:
The Licensee has projected an Annual revenue Requirement of Rs.16,789.65 Crore for the year 2018-19, which is 21.2% higher than approved figure for FY 2017-18 and marginally higher than the revised estimates for the current Financial Year. A net revenue gap of Rs. 1679.85 Crore has been projected with a request to allow this gap.
Some of the main observations on the ARR submissions for FY 2018-19 are as under;
1. While submitting energy balance for DHBVN, the Licensee has mentioned in Table 20 that there will be lot of surplus power during FY 2017-18 and FY 2018-19. The relevant figures and the Para below it read as under, Energy Balance Unit FY 2017- FY 2018-19 18 Power Purchase at State MUs 29,380.32 29,845.76 Periphery Energy Input at State MUs 25,593.11 25,820.07 Periphery Surplus MUs 3,787.21 4,025.69
The Nigam has assumed that the surplus power available will be sold entirely as ‘inter-state sales’ throughout FY 2017-18 and FY 2018-19 at 80% of average variable power purchase cost.
The above statements show that the Licensee is projecting a surplus of 15-16% in power availability which is proposed to be sold at 80% of average variable power purchase cost. This is ridiculous. Why should the Licensee buy extra power in the first place and then sell it at a loss.
The Licensee every now and then is approaching the Commission seeking permission to buy extra power at high rates on the ground of shortage in power availability and then sell this power at a low rate. This is
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pure mismanagement in power procurement and would result in direct additional financial burden to the consumers. The net impact would be,
a) Increased cost of extra power purchased, sale of surplus power at a rate lower than the purchase rate and resultant revenue gap; b) Inflated figures of so called stranded power, which results in higher Additional Surcharge to be paid by consumers availing open access facility. 2. In Table 24 the Licensee has projected R&M expenses of Rs.129.60 Crore and Rs.151.06 for FY 2017-18 and FY 2018-19 respectively. These provisions are on very high side if we compare with the actual expenses of Rs.68.23 Crore intimated by the Licensee for FY 2016-17. Accordingly, a realistic estimate may kindly be allowed instead of un-necessarily inflating the Annual Revenue Requirement. . 3. In Table 30 of the filing net Interest & Financing Charges of Rs.888.53 Crore and Rs.900.92 Crore have been projected for FY 2017-18 and FY 2018-19 respectively which are much higher compared to the expenses allowed in ARRs for FY 2016-17 and FY 2017-18 i.e. Rs.216.52 Crore and Rs.340.99 Crore respectively. Even there are large sums projected as interest on CAPEX loans, which may kindly be allowed only linking with the expected improvement in the distribution system and ultimate benefit to be accrued to the consumers. 4. In Table 35 the licensee has asked for RoE of Rs.406.91 Crore and Rs.511.13 Crore for FY 2017-18 and FY 2018-19 respectively. Hon’ble Commission disallowed any RoE in the previous years and it is rightly so that a Company who has eaten up its Capital cannot be given the benefit of any RoE. Accordingly, this provision may please be disallowed for both these years as well. 5. The Licensee has been recovering large amount by way of FSA from different categories of consumers, and other charges such as Wheeling Charges, Cross Subsidy Surcharge and Additional Surcharge from Open Access Consumers which have not been reflected in revenue projections. Due provisions for these revenues may please be ensured while allowing the total revenue requirement.
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6. Under Chapter 4 of the ARR filing the Licensee has indicated that the resultant revenue gap will be met through the OFR as proposed under UDAY assuming that the current levels of tariff will be allowed to continue. In fact with the introduction of UDAY Scheme it was expected that the distribution licensees would show marked improvement in their performance parameters and it will ultimately benefit the consumers by way of improved power supply services and considerable relief in tariffs. However no such benefit is in sight and consumers are forced to continue paying very high tariffs every year.
IMPORTANT ISSUES NEEDING IMMEDIATE ATTENTION OF THE HON’BLE COMMISSION: There are a couple of issues which are being brought to the kind notice of the Hon’ble Commission as these are resulting in un-necessary burden on the consumers;
1. Recovery of Fuel Surcharge Adjustment in an arbitrary manner:- S.61 of the Electricity Act, 2003 provides for the specifying the terms and conditions for determination of tariff with special reference to various guidelines including the following,
“(c) The factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments;
(d) Safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner;
(e) The principles rewarding efficiency in performance;
(f) Multi-year tariff principles;
(g) That the tariff progressively reflects the cost of supply of electricity and also, reduces and eliminates cross-subsidies within the period to be specified by the Appropriate Commission;”
S.62 (4) of Electricity Act, 2003 provides for the manner in which tariffs are to be revised and reads as under,
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“(4) No tariff or part of any tariff may ordinarily be amended more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified.”
Regulation 66 of the HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 provide for the recovery of FSA on quarterly basis. It reads as under,
“66. Fuel and Power Purchase Cost Surcharge Adjustment (FSA) 66.1 The distribution licensees shall recover FSA amount on account of increase in fuel and power purchase costs from the consumers on a quarterly basis so as to ensure that FSA accrued in a quarter is recovered in the following quarter without going through the regulatory process i.e. FSA for the quarter “July to September” is recovered in the following quarter “October to December”.
66.2 FSA shall be calculated only in respect of approved power purchase volume including short term power purchase cost, if any, for the relevant year from all approved sources. Drawl of power under UI mechanism, if any, shall be allowed only when it is not in violation of grid discipline and shall be subject to a price cap of average revenue realisation from all consumer categories for that year.
Average revenue realisation = (Total revenue assessed for electricity supply in Rs + Government Subsidy in Rs) / Total sales in Units.
Inspite of these clear policy guidelines, the distribution licensee is levying the FSA purely on arbitrary manner. The Hon’ble Commission had given clear verdict about the recovery of FSA over a designated period but the Utility is continuing to recover the FSA and there is no indication when the consumers could get relief from these payments.
Hon’ble Commission through its order dated 03.03.2017 in Petition Nos. HERC/PRO-33 of 2015 and 35 of 2015 filed by the Distribution Licensees for recovery of Fuel Surcharge Adjustment (FSA), pursuant to the directives of the Commission in the ARR & Tariff Order dated 1st August, 2016, had directed as under; The Commission, Orders that the recovery of these FSA’s shall continue at the rate determined above till such time i.e. 65 paise per unit from 01.04.2017 to 30.06.2017 and @ 37 paise per unit
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thereafter till the total amount as determined in the present Order is fully recovered.
The Licensee is charging the FSA at the same rate till date without ensuring that it should have stopped after the amount determined by the Commission was fully recovered.
There is a misconception in the mind of the Licensee that FSA is a source of income or part of tariff. The fact is that the FSA was permitted under S.62(4) of the Act as a stop gap arrangement till the tariffs were revised annually. But this has become a perpetual charge and constitutes a substantial part of the overall tariff for the consumers. When the new tariff order is notified, the previous FSAs must be merged in the tariff. This is how in most of the States FSA, if any, is merged in the revised approved tariff.
2. Need for reduction of cross subsidy surcharge on open access power:
The licensee has failed to submit the voltage-wise and consumer category- wise Cost of Service along with the present ARR filing. This is besides the repeated directions given by the Hon’ble Commission in this regard. No computation of cross-subsidy to be charged from the consumers could be done without adequate supporting data.
We may draw kind attention of the Hon’ble Commission to the following important provisions;
S.42 of the Electricity Act, 2003 lay down duties of distribution licensees and provides as under with regard to levy of surcharge and cross subsidy surcharge,
“Provided that such open access may be allowed on payment of a surcharge in addition to the charges for wheeling as may be determined by the State Commission:
Provided further that such surcharge shall be utilised to meet the requirements of current level of cross subsidy within the area of supply of the distribution licensee:
Provided also that such surcharge and cross subsidies shall be progressively reduced in the manner as may be specified by the State Commission:”
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The Tariff Policy, 2016 notified on 16.01.2016 lays emphasis on reducing cross subsidies and to create environment where every consumer pays for the cost of service. Specific Provisions of this Policy are reproduced hereunder.
4.0 OBJECTIVES OF THE POLICY
The objectives of this tariff policy are to:
(a) Ensure availability of electricity to consumers at reasonable and competitive rates;
(d) Promote competition, efficiency in operations and improvement in quality of supply;
(g) Evolve a dynamic and robust electricity infrastructure for better consumer services;
(h) Facilitate supply of adequate and uninterrupted power to all categories of consumers;
(i) Ensure creation of adequate capacity including reserves in generation, transmission and distribution in advance, for reliability of supply of electricity to consumers.
8.0 DISTRIBUTION
Supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates is one of the main objectives of the National Electricity Policy. The State Commission should determine and notify the standards of performance of licensees with respect to quality, continuity and reliability of service for all consumers.
Making the distribution segment of the industry efficient and solvent is the key to success of power sector reforms and provision of services of specified standards. Therefore, the Regulatory Commissions need to strike the right balance between the requirements of the commercial viability of distribution licensees and consumer interests. Loss making utilities need to be transformed into profitable ventures which can raise necessary resources from the capital markets to provide services of international standards to enable India to achieve its full growth potential.
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Efficiency in operations should be encouraged. Gains of efficient operations with reference to normative parameters should be appropriately shared between consumers and licensees.
8.5 Cross-subsidy surcharge and additional surcharge for open access
8.5.1 National Electricity Policy lays down that the amount of cross-subsidy surcharge and the additional surcharge to be levied from consumers who are permitted open access should not be so onerous that it eliminates competition which is intended to be fostered in generation and supply of power directly to the consumers through open access.
A consumer who is permitted open access will have to make payment to the generator, the transmission licensee whose transmission systems are used, distribution utility for the wheeling charges and, in addition, the cross subsidy surcharge. The computation of cross subsidy surcharge, therefore, needs to be done in a manner that while it compensates the distribution licensee, it does not constrain introduction of competition through open access. A consumer would avail of open access only if the payment of all the charges leads to a benefit to him.
While the interest of distribution licensee needs to be protected it would be essential that this provision of the Act, which requires the open access to be introduced in a time-bound manner, is used to bring about competition in the larger interest of consumers.
Inspite of these clear Policy guidelines, there is very heavy cross subsidy element in the electricity tariff in Haryana which is causing undue burden on the subsidizing sector of consumers. There has been no attempt to reduce cross subsidy. Unless the cross subsidy on subsidized sectors is reduced successively other sectors like industry would continue to real under the pressure of heavy cross subsidies burden.
The methodology adopted by the Hon’ble Commission to determine the cross- subsidy surcharge in the ARR order for FY 2017-18 was not based on
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voltage-wise and consumer category-wise Cost of Service. These were just divided in two broad groups i.e. HT (11 kV and above voltages) and LT, whereas the cost of service for 11 kV, 33 kV, 66 kV and above would vary to large extent because of the cost of the infrastructure involved. It would be totally unfair to club all HT consumers under one group.
Hon’ble Haryana Commission had been reducing the cross subsidy surcharge over the past many years and it was 40% of the subsidy by the year 2013-14. It was only since the year 2014-15, the cross subsidy was again equated with the subsidy, thus resulting in abrupt increase of the cross subsidy surcharge. This also resulted in making purchase of power through open access less attractive, which is also against the Policy Guidelines quoted above. Unless the cross subsidy to the subsidized sector is reduced, the resultant burden would continue to be on the subsidizing sector.
In this regard we would like to draw kind attention of the Hon’ble Commission to two major Government documents i.e.
(i) Draft Energy Policy formulated by Niti Aayog, GoI:
The Federal policy think-tank Niti Aayog has pitched for letting power utilities realize full market price from all consumers by doing away with cross- subsidy provided to poor consumers. At present, industrial consumers cross- subsidize residential users, while farmers are being cross-subsidized by the State Government.
Relevant extracts from this policy Document are reproduced for favor of consideration,
“Any fear of a rise in price to vulnerable consumers should be addressed by subsidy on power use through Direct Benefit Transfer (DBT). Distribution companies should pay full market-determined price to generation companies and receive the same from customers with the latter compensated through DBT.”
“The eventual goal should be to bring down the cross-subsidy from industry, placing the burden directly on the budge. This would contribute to making electricity-intensive businesses more competitive.”
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(ii) “Large power consumers may not have to bear cross-subsidy charges” – was the statement made by the Union Power Minister on 24.01.2018, speaking at a conference organized jointly by Central Electricity Authority (CEA) and Independent Power Producers Association of India (IPPAI) wherein he said,
“The government was planning to remove cross-subsidy charges levied on large power consumers, which will give a major relief to industrial and commercial establishments.”
“The government was planning to amend the National Tariff Policy, which provides for a maximum of 20% cross-subsidy charges. Some States were charging as high as 100%.”
"We want to do away with the cross-subsidy charges. Rather the states should give direct benefit transfers to the targeted consumers."
“The Union Power Ministry will consult the State Governments on the removal of cross-subsidy charges
“The government was working on amendments to the Electricity Act to levy hefty penalties on power distribution companies for load-shedding and make provisions for direct subsidy transfers by states to power consumers.” We would urge the Hon’ble Commission to address this issue and reduce the cross subsidy surcharge levied on industrial consumers so as to help the industry to be more competitive and viable.
3. Need for reduction/doing away with the levy of Additional Surcharge: The Licensee has estimated a demand of Rs.1.21/kWh as Additional Surcharge to be recovered from open access consumers against the current charge of 99 Ps/kWh approved through ARR order dated 11.07.2017 for FY 2017-18.
Although we have already argued at length on this issue during the hearing held on 16.11.2017 in Petition No. HERC/PRO-56 of 2017, but to reiterate our view point we would submit that the very basis of calculation of so termed stranded generation capacity need to be examined in depth. The consumers are already paying for the cost of Fixed Charges paid to the generating companies in multiple ways, like;
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a) The Fixed Cost is fully booked in the cost of power purchase allowed to the Licensee through every successive ARR order; b) The Fixed Demand Charges recovered from the consumers include substantial part of the fixed cost borne by the Licensee; c) While allowing True up at the end of the year any part of the unrecovered fixed cost is allowed to the Licensee; d) While computing the FSA, any unrecovered gap in the cost of power purchase is fully figured in. e) Out of the power purchased by consumers over IEX and PXIL platforms, there is sizeable part of power purchased by the Licensee also. f) The power claimed to have been surrendered/backed down depends on what was the PLF of the specific generating stations. g) The Petitioner needs to certify that the backing down was as per their instructions and not a fait accompli. h) It has to be certified that the backing down was done on merit order basis and not by pick and choose method. Thus there is no justification for the levy of Additional Surcharge, the amount which is already recovered under different heads. In this regard, we need to refer to the ARR order of HERC for FY 2014-15 dated 29.05.2014, which recognized the fact that Licensee was already recovering substantial part of the fixed cost. Extract from this order are reproduced for ready reference;
The Commission, therefore, after careful consideration of the submissions made in the petition by UHBVNL, replies / comments furnished by various stakeholders in reply to the petition, the comments / submissions by the petitioners and other stakeholders made during the hearing held on 27.05.2014 and the relevant statutory provisions is of the considered view that the additional surcharge cannot be attributed to the entire energy drawn through Open Access as the Discoms are expected to take into consideration some quantum of power that would be drawn by the Open Access Consumers based on the past trend while undertaking demand assessment and load management. The Commission therefore considers it appropriate to pass on 50% of the stranded cost worked out by the Discoms on account of power
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drawn through Open Access. Such reduction is necessary in view of the fact that the Discoms charges from most of the Open Access consumer a part of the cost of distribution system and cost of 6% losses as wheeling charges. Further the Discoms also collect, from most Open Access consumers, demand charges on the basis of the connected load / contract demand. Hence in the considered view of the Commission some adjustment of the demand charges paid by the Open Access consumers in the stranded fixed cost of the Discoms has to be made.
Another supporting mention was made to the recent order dated 30.10.2017 passed by HPERC while determining the Additional Surcharge for HPSEB for FY 2017-18. HPERC approved an Addl. Surcharge of 51 Ps/unit after giving adjustment of 67.96 Ps/unit as fixed cost already recovered through Demand Charges from HT consumers. Relevant extracts are reproduced for ready reference,
The Commission in its order dated 28-10-2016 for determination of the rate of additional surcharge has suggested HPSEBL to submit the proposal based on alternative methodologies used in other states in addition to the same based on the present methodology. HPSEBL in this petition has worked out the rates of additional surcharges based on the methodologies adopted in the states of Gujarat, Punjab and Haryana. These rates of additional surcharges as worked out by HPSEBL has been 0.91/- Rs./kWh, 5.26/- Rs./kWh and 1.17 Rs./kWh based upon Gujarat, Punjab and Haryana methodologies respectively. So, these rates are coming out to be very much on higher sides in comparison to the rates presently prevailing in H.P. The Commission, therefore, feels appropriate in the interest of all stakeholders involved to adopt the same methodology in this order as well which has been adopted in our earlier orders for determination of the rate of additional surcharge. The Commission has thus adopted a methodology which, according to it, is not only fair and prudent but also serves the interest of the open access consumers in a better way.
4. Need for treating the two State Power Distribution Utilities as independent Companies: Although the State unbundled its power sector in the year 1999, but till date the two Distribution Utilities are tied with the biblical chord and have
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same electricity tariffs and Rules & Regulations. It is an admitted fact that the efficiency of two Companies is different and these end up with different revenue gaps/surpluses at the end of each financial year. As per past practice, at the end of the year the benefits are divided without any corresponding benefit to the consumers in each company. It is high time now that these Companies may be treated totally independent and if one is able to generate higher resources or operate better, the benefit should be passed on to the consumers of the area. There should be some incentive for better performing Utility.
5. Need for reduction in electricity tariff for industrial consumers: As is very well known, the electricity tariffs for industrial consumers in Haryana are one of the highest in the country. The successive increase in tariff has put the State industry at a substantial loss. Many of the industries are already under severe debt trap as they are not able to meet even the cash requirements for day to day operations. Thus there is urgent need for the Hon’ble Commission to come to their rescue and help these industrial units to revive by giving suitable reduction in the electricity tariffs. This sector is highly cross subsidizing the subsidized sector of consumers. According to the national Electricity Policy and the Tariff Policy of the Govt. of India, it is the duty of the Appropriate Commission to reduce the cross subsidies and to achieve a scenario where every electricity consumer is required to pay the actual cost of service.
In Haryana where the agriculture sector is the biggest subsidized sector of consumers (consuming nearly 25-26% of the total sales) but this subsidy is being borne by the State Govt. The second largest subsidized sector is the Domestic sector (consuming nearly 23-24% of energy sales) and is likely to grow much faster than any other category of consumers.
Table 2 of the ARR filing shows that over the years, proportion of power sold to industries has declined from 32.56% during FY 2011-12 to 27.36% in FY 2016-17, which needs to be reversed. This is not at all a healthy sign for the State. Industrial sector is the main contributor to the State revenues in addition to providing employment opportunities and helping development of infrastructure in the State.
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Reply of DHBVNL:- 1. True-up Expenses for FY 2016-17
a) DHBVN submits that the figures considered for Truing up of FY 2016-17 are as per the audited accounts of FY 2016-17.
b) Nigam is now focusing on preventive maintenance of assets and as a result the expenditure in FY 2017-18 and in current years has increased substantially. In FY 2017-18 amount of 107 Crore has been spent on R&M as compared to amount FY 2016-17 of 68.23 Crore which is approximate to the commissions allowed number. Nigam has made significant efforts towards R&M of assets and the details pertaining to the same is tabulated as under:-
Repair and Maintenance FY 2016-17 FY 2017-18 Cost Approved Actual Approved Actual Amount (in Crores) 132.77 68.23 114.16 107.00
c) Nigam submits that the Power Discoms are in process of to provide 24x7 power in the state in line of the government policy of 24x7 power supply to all. Capital expenditure for loss reduction is required, schemes which are aim to provide. Smart Grid in Gurgaon and smart metering in other areas like Faridabad is in under implementation, once the capacity building is achieved, the capital expenditure will also be stabilised. DHBVN would like to submit that the main thrust over the capital expenditure for the sector is to improve efficiency and meet the growing demand from the existing and new consumers. Hence, in order to ensure that the consumers are benefitted by the various schemes adopted by the Discom; a meticulous planning and analysis has been done before finalizing the expenditure over the areas in order to supply quality power.
d) In regard to the voltage wise CoS, Nigam submits that the Commission in line with the APTEL judgment dated 30.05.2011 in Appeal No. 102,103 & 112 of 2010 had adopted the methodology suggested by the Hon’ble APTEL in the ibid judgment dated 30.05.2011 for broadly working out voltage wise CoS for the FY 2016-17. However, the Nigam further submits that for computation of CSS, the Commission has considered the amended National Tariff policywhich has provided a revised CSS formula. In addition, the Nigam submits that once
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the study for carrying out voltage wise CoS is accomplished, the findings related to the same shall be furnished.
e) It’s a fact that the Hon’ble Commission has not allowed RoE to Discom in FY 2015-16 and FY 2016-17.
f) The state power Discoms has reported improved various financial and physical parameters and accordingly passed the benefit of 100 paisa/unit on account of reduction in FSA.
2. Annual Performance Review for FY 2017-18
a) The utility have reported improvement in their working, however uncontrollable cost such as impact of 7th pay commission and increase in power cost on account of change in law have been considered while projecting ARR for FY 2017-18.
b) In regard to the objector’s query on the APR for FY 2017-18, the Petitioner had already given its reply on the same issues for True-up of FY 2016-17 and the same shall be considered for the brevity to the petitioner replies for Annual Performance Review for FY 2017-18.
3. Annual Revenue Requirement for FY 2018-19
a) The licensee is under universal obligation to supply power to the consumer in state. The power demand is uneven against the flat supply curve, the resultant surplus power in off peak hours has to be sold at lower cost.
b) Nigam is now focusing on preventive maintenance of assets and as a result the expenditure in FY 2017-18 and in current years has increased substantially. In FY 2017-18 amount of 107 Crore has been spent on R&M as compared to amount FY 2016-17 of 68.23 Crore which is approximate to the commissions allowed number, while the R&M cost for FY 2018-19 has been projected in line to the 57.3 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012.
c) The Commission has been allowing the working capital borrowings and interest thereon on normative basis irrespective of the actual borrowings and
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the interest cost. The demands are made on actual basis as the approved of normative interest has no impact on tariff.
d) The loss trajectory has already been restricted in line to the UDAY targets and no additional interest cost on working capital, and freshequity infusion under UDAY, it is appropriate to allowed return on equity in line to the approved return on equity by HERC in its tariff order dated 11th July 2017. e) It is submitted that FSA is not a part of ARR, while the projection of ARR is in line to the HERC MYT Regulations 2012, and the non-tariff income is suitably adjusted by the HERC while allowing ARR to the Discom.
f) After UDAY the state Discoms have shown significant improvement in operational and financial parameters, registering profits in FY 2016-17 and FY 2017-17, thus, no additional OFR requirements posed and the benefits in shape of FSA reduction has already been passed on to the consumers.
4. IMPORTANT ISSUES NEEDING IMMEDIATE ATTENTION OF THE HON’BLE COMMISSION 1) Recovery of Fuel Surcharge Adjustment in an arbitrary manner The Fuel Surcharge Adjustment (FSA) in the context of a Discom is essentially a power purchase cost adjustment. Every year the Commission in its order on the Revenue Requirement for the ensuing year estimates the expenditure for the ensuing year under different heads i.e. power purchase cost, employees’ cost, administrative expenses, depreciation, interest and finance charges, etc. The tariff for the ensuing year is determined on the basis of the projected expenditure. There is a mechanism of true up for the various items of expenditure in the subsequent ARR, if the actual expenditure is more than the projected expenditure subject to norms of the HERC and prudence check.
The power purchase cost account for almost 80% of the total cost of the DISCOMs and undergoes lot of variation during the year. Waiting for the true up on an annual basis would lead to financial hardship to the DISCOMs as the bills of the generators have to be paid on a monthly / bimonthly cycle. An increase in the power purchase cost for the DISCOMs beyond the approved cost for a year results in a FSA which has to be recovered as per HERC regulations.
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Conceptually, FSA in respect of power purchase arises due to any one or more or a combination of the following reasons:-
i. Higher quantum of power purchase as compared to quantum allowed by HERC.
ii. Higher per unit cost of power purchase from various sources as compared to cost allowed by HERC.
iii. Change in the power purchase mix as compared to that allowed by HERC
Generally, FSA arises as a consequence of combination of above three factors for which the FSA claim is allowed by HERC for recovery from the consumers. FSA is, in fact, the difference in the actual cost of power purchase (calculated as per the norms) and the power purchase cost allowed by the HERC in the ARR / Tariff order.
The Electricity Act 2003 under section 62 provides:-
“62. (1) The Appropriate Commission shall determine the tariff in accordance with provisions of this Act for – (4) No tariff or part of any tariff may ordinarily be amended more frequently than once in any financial year, except in respect of any changes expressly permitted under the terms of any fuel surcharge formula as may be specified.”
The National Tariff Policy provides:
“8.2 Framework for revenue requirements and costs
8.2.1 The following aspects would need to be considered in determining tariffs:
(1) All power purchase costs need to be considered legitimate unless it is established that the merit order principle has been violated or power has been purchased at unreasonable rates. …
Actual level of retail sales should be grossed up by normative level of T&D losses as indicated in MYT trajectory for allowing power purchase cost subject to justifiable power purchase mix variation (for example, more energy may be purchased from thermal generation in the event of poor rainfall) and fuel surcharge adjustment as per regulations of the SERC.”
Earlier the FSA was levied on an annual basis or more but the present HERC regulations (notified in December 2012) has allowed the recovery of FSA from the
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In exercise of the powers conferred upon Haryana Electricity Regulatory Commission under Section 181 (zd) and in lines with the Clause 8 of National Tariff Policy, Haryana Electricity Regulatory Commission (HERC) has notified HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012.
Regulation 66 of the ibid MYT Regulations relating to Fuel Surcharge Adjustment is reproduced as under:-
“66. FUEL AND POWER PURCHASE COST SURCHARGE ADJUSTMENT (FSA)
66.1 The distribution licensees shall recover FSA amount on account of increase in fuel and power purchase costs from the consumers on a quarterly basis so as to ensure that FSA accrued in a quarter is recovered in the following quarter without going through the regulatory process i.e. FSA for the quarter “July to September” is recovered in the following quarter “October to December”.
66.2 FSA shall be calculated only in respect of approved power purchase volume including short term power purchase cost, if any, for the relevant year from all approved sources. Drawl of power under UI mechanism, if any, shall be allowed only when it is not in violation of grid discipline and shall be subject to a price cap of average revenue realization from all consumer categories for that year.
Average revenue realization = (Total revenue assessed for electricity supply in Rs + Government Subsidy in Rs) / Total sales in Units.
66.3 For the purpose of recovery of FSA, power purchase cost shall include all invoices raised by the approved suppliers of power and credits received by the distribution licensees during the quarter irrespective of the period to which these pertain for any change in cost in accordance with tariff approved by any regulator/ government agency mentioned in regulation 59.4. This shall include arrears/refunds, if any, not settled earlier. In case data of the last month in a quarter is not available for calculating FSA to be levied in the following quarter, the licensee shall use an estimate based on available data of the first two months of the quarter. On availability of the actual figures, the difference on this account shall form part of FSA of the subsequent quarter. If the actual data for any quarter is not made available by the licensee before the end of the following quarter for this adjustment, the FSA finally allowed for that quarter based on actual figures supplied after the prescribed date shall be limited to the earlier estimated amount or the amount based on the actual figures, whichever is lower.
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66.4 In case of negative FSA, the credit shall be given to the consumers by setting off the minus figure against the positive figure of FSA being charged from the consumers. In other words, credit of FSA shall be given only against FSA being charged so that the base tariff determined by the Commission remains unchanged.
66.5 Only the allowed percentage of transmission and distribution losses for the relevant year as per the approved ARR shall be taken into account for working out FSA.
66.6 The amount of FSA shall be recovered by each distribution licensee by charging a uniform FSA (per kWh) across all consumer categories in his area of license.
66.7 for moderation purposes, the recovery of per unit FSA shall be limited to 10% of the approved per unit ‘average power purchase cost’ or such other ceiling as may be stipulated by the Commission from time to time. For calculating FSA, variations in quarterly purchase volume from an approved source are allowed subject to an overall ceiling of annual approved volume from that source. In case a portion of the FSA for any quarter is not recovered due to the ceiling of 10%, the under recovered amount shall be added to the FSA for the next quarter.
66.8 Per unit rate of FSA (paisa/kWh) shall be worked out after rounding off to the nearest paisa;
66.9 The distribution licensee shall submit details relating to FSA recovery to the Commission for each quarter in the following format by the end of the following quarter.
66.10 FSA (Rs/kWh) shall be worked out as per the following formula:
Total FSA (Rs million) = PC + Int + AdJst Q + (AdJstA/4)
FSA (Rs / kWh) = {PC + Int + AdJst Q + (AdJstA/4)} ÷ PS
Where PC = {(Actual average power purchase cost (Rs/kWh) for the quarter) - (Average power purchase cost (Rs/KWh) approved by the Commission for the relevant year)} X PP PP = Total volume of power purchase during the quarter worked out based on total volume of powers sold to all the consumer categories grossed up by approved T&D loss. Sales to AP consumers are to be worked out in accordance with the methodology approved by the Commission in the ARR for the relevant year (MU). PS = Estimated sales volume for the following quarter with AP sales as approved by the Commission in the ARR for the relevant year (MU).
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Actual average power purchase cost (Rs./KWh) = ( total cost of power purchased during the quarter from approved sources and UI as per regulation 66.2 in Rs million) / (total volume of power purchased in the quarter from approved sources and UI in MU) as per regulation 66.2) Int = Additional working capital cost allowed on account of FSA amount to be worked out as under: Int = {(total FSA/12) X (interest rate allowed for calculation of working capital in the ARR of the current financial year)} in Rs million.
AdJst Q = Under/over recovered FSA of the previous quarter in accordance with regulation 66.3 and 66.7 in Rs million.
AdJstA = Annual adjustment amount based on truing up of the FSA of the previous year by the Commission in Rs million 66.11 The licensee shall ensure that the Actual/ estimated FSA arising in a quarter is recovered in the following quarter. In case the licensee does not ensure levy of FSA based on the methodology given herein, the licensee shall have no claim to recover the FSA from the consumers in any manner in any subsequent period except in accordance with regulation 66(3) and 66(7). The unrecovered FSA for the previous financial year, details of which are supplied to the Commission by the distribution licensee, may either form part of power purchase cost for the next financial year or may be allowed to be recovered as annual adjustment amount in the quarterly recovery of FSA in the next financial year as the Commission may decide. 66.12 In case Government of Haryana decides to provide subsidy on account of FSA to a particular consumer category, the amount of subsidy equivalent to the FSA recoverable from the concerned consumer category, shall be deposited in advance by the Govt. Otherwise the recovery shall be affected from the consumer through electricity bills. It shall be the responsibility of the distribution licensees to seek prior approval of the State Government in this regard and maintain appropriate record of the same.”
In line with the ibid Regulation of HERC, the Distribution Licensees calculates and recover FSA amount on account of increase in fuel and power purchase costs from the consumers on a quarterly basis so as to ensure that FSA accrued in a quarter is recovered in the following quarter without going through the regulatory process.
Moreover, the Nigam further submits that through Order dated 03.03.2017, the Commission, orders that the recovery of these FSA’s shall continue at the rate determined above till such time i.e. 65 paise per unit from 01.04.2017 to
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30.06.2017 and @ 37 paise per unit thereafter till the total amount as determined in the present Order is fully recovered. The same is being implemented in DHBVN through sales circular D14-2017 dated 28.03.2017.
In regard to the levying of FSA for FY2017-18, total FSA for the 1st and 2nd Quarter of FY 2017-18 has been calculated as Rs. 1,125.22 Cr out of which, FSA against agricultural consumption for FY 2017-18 is Rs. 267.93 Cr and against the non-agricultural consumption is Rs. 857.29 Cr. The FSA calculated for 1st and 2nd Quarter of the FY 2017-18 is Rs. 1.22 per unit. However, taking into consideration the capping of 10% as per MYT Regulation 2012 on the approved power purchase cost (which is Rs. 3.89 for FY 2017-18), the maximum allowable limit for levy of FSA works out to 39 paisa per unit.
Presently as per the HERC Order dated 03.03.2017 (in Case No. HERC/PRO- 33 of 2015 & 35 of 2015), an amount of Rs. 828 Cr on account of pending FSA of earlier years is being recovered @65 paisa per unit w.e.f. 01.04.2017 which was further reduced to 37 paisa per unit w.e.f. 01.7.2017.
In order to avoid any additional burden to the consumers and change in billing, it has been decided to recover the FSA of first two quarters (i.e. 857.29 Cr) @37 paisa per unit being the prevailing rate of recovery for 1st and 2nd Quarter of FY 2017-18 in 3rd Quarter of FY 2017-18 instead of 39 paisa per unit.
2. Need for Reduction of Cross Subsidy Surcharge on open Access power
As per National Tariff Policy (NTP), the Discom can levy cross subsidy up to a limit of +/-20% of the average cost of supply. Furthermore, the decision regarding the same is taken by the Commission; also, the cross-subsidy charges applied are within the limits as defined under NTP. Further, as per HERC tariff order for FY 2017-18, HERC has worked out the cross-subsidy surcharge based on the voltage wise calculation of CoS by apportioning the power purchase cost at different voltage levels taking into account the distribution losses at the relevant voltage level and the upstream system. For HT industry the Commission has computed CoS and average revenue realization as 6.91Rs./kW and 8.54 Rs./kW respectively, henceforth the Cross Subsidy Surcharge (Rs./kWh) has been calculated (8.54-6.91) i.e. 1.63 Rs./kWh which is within the limit of +/-20% of the average cost of supply as per NTP. Further it is submitted that determination of
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tariff is prerogative of The Commission and the Commission determined tariff after prudence check of Discom submission.
3. Need for Reduction/doing away with the levy of Additional Surcharge
In accordance with the provisions of the Electricity Act 2003, the distribution licensees have an obligation to supply power to all the consumers under the respective areas of supply; and correspondingly they have to enter into long term agreements for purchase power from various generating stations. As such, when these embedded consumers draw power from elsewhere apart from the licensee under open access, the fixed cost of the supply taken by these consumers from elsewhere is still payable by the licensee, making it a stranded capacity for the distribution licensee.
It is submitted that the additional surcharge is payable for the stranded capacity of the distribution licensee. In the event of the open access consumers moving out of the system of the distribution licensee, the distribution licensee has to bear stranding of assets which causes financial loss to the distribution licensees and the same needs to be compensated by way of additional surcharge, as allowed by the Commission vide MYT tariff order dated 29.5.2014.
The Commission vide order dated 11th July, 2017 has allowed an additional surcharge of Rs. 0.99 per unit.
4. Need for treating the two state power distribution utilities as Independent companies DHBVN submits that as per the current practice, the Commission determines tariff for the State. DHBVN is not conferred with the power to decide on this subject.
5. Need for reduction in Electricity Tariff for Industrial Consumers It is submitted that the tariff of different states cannot be compared vis-à-vis tariff of other states due to difference in power purchase mix, loss levels, Consumer Mix and thereby the Cost of Supply; the comparison of tariff in various states should be judged against respective average power purchase cost as the tariff rationalization is based on the overall approved annual revenue requirement of the DISCOMs, out of which around 80% corresponds to the net power purchase cost. The Commission has a two-sided responsibility to protect the financial interests of the distribution licensees and to balance the interests of various stakeholders. The
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Tariff for a particular consumer category is determined by the Commission on the basis of the Annual Revenue Requirement approved for a particular year. The vis- à-vis tariff comparison of Haryana and the neighbouring states are mentioned below:
Tariff Rates (with FSA) per unit to consumer (Rs./kWh) HT Industry Financial Name of the States Tariff/Unit Year Delhi (Large Industrial Supply) 2015-16 10.01 Haryana 2016-17 8.51 Punjab (LIP) 2016-17 7.97 Rajasthan 2015-16 8.31 Uttar Pradesh 2016-17 8.60 LT Industry Delhi (10 kW to 20 kW) 2015-16 9.64 Haryana (10 kW to 20 kW) 2016-17 8.33 Punjab (Small Industry) 2016-17 6.51 Rajasthan 2015-16 7.25 Uttar Pradesh 2016-17 8.83 LT Industry Delhi (20 kW to 50 kW) 2015-16 9.64 Haryana (20 kW to 50 kW) 2016-17 8.41 Punjab (Medium Industry) 2016-17 7.29 Rajasthan 2015-16 7.25 Uttar Pradesh 2016-17 8.83
However, the powers of the same are conferred upon the Commission and the related matter can be taken up with the Commission.
Commission’ View
The Commission has considered the objections raised and reply thereon filed by DISCOMs and will be considered while passing the Order.
2.3.4 Objections filed by Sh. Pankaj Bhalotia
Sh. Pankaj Bhalotia has also filed two petitions in this Commission, pertaining to the issues of MMC and FSA (HERC/PRO-3 of 2018 & HERC/PRO-5 of 2018, respectively). He has repeated the contents of his petitions in the objections also. Further, in his Petitions he has requested that he will not be able to travel to Panchkula and requested the Commission not to fix any hearing for this application. Accordingly, by virtue of the decisions taken in this Order, the said petitions shall also be disposed of.
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1) The Commission gave only 10 days to submit comments / objections which I believe are very short number of days to go through the petition and file objections /comments and suggestion.
Since the Discoms of the State are under profit, so should there not be reduction in tariff for FY 2018-19, whereas DHBVN through its petition HERC/PRO-83 of 2017 has pleaded to continue the current levels of Tariff to meet the expenses.
2) As per the provisions of section 64 (3) of the Electricity Act, 2003, the appropriate commission, within 120 days of filing the application will either issue a tariff order or reject the application. Is 120 days has not elapsed of petition HERC/PRO-83 of 2017 which was filed on 5 December 2017 with the Commission. Is there no contravention of the provisions of section 64 (3) of the Electricity Act, 2003? I have already written letters in this regard to the Commission dated: 01/06/2018 and 23/06/2018 respectively.
3) The Commission should go through the reply of the Discom on the objections filed by me, because I have noticed irrelevant reply of the Discoms in past when I had objections, suggestions on these matters. The discoms reply only for the sake of the reply and it has nothing to do with comments, suggestions, objections filed by me.
4) The Commission while deciding tariff for FY 2017-18 in Case No. HERC/PRO-39 of 2016 & HERC/PRO-40 of 2016, did acknowledged my suggestions/ objections to have separate tariff structure for prepaid meter and for Independent Feeder, but so far I don’t think any-thing done so far either by the Commission or by the discom to have separate tariff for prepaid meter and for Independent Feeder in this tariff order or in future tariff orders.
5) A separate tariff structure for prepaid electricity consumers in place of 5% rebate:
I have been writing and requesting from quite some time to the Commission that current tariff structure of domestic supply category consumer, which is said as telescopic in nature, is neither maintainable nor implementable in a prepaid electricity meter. So instead of having 5% rebate in tariff for prepaid meter consumers, I request Commission to please have separate tariff structure for prepaid electricity consumers or to have such tariff structure for a domestic supply category consumer which can and is maintainable and implementable in a prepaid electricity meter. A Prepaid Electricity Meter does not work like that firstly it will see consumption is less than 100 or more than 100 and then start charging accordingly. The Category II and
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Category III of current domestic supply tariff IS NOT maintainable and implementable in a prepaid electricity meter.
So requesting again to the Commission to either (a) prescribed separate tariff structure that is implementable and maintainable in a prepaid electricity meter, instead of 5% rebate in tariff, or (b) design such domestic supply category tariff which is with current 5% rebate is implementable and maintainable in a prepaid electricity meter.
6) A separate tariff structure for Consumers taking supply through Independent Feeder and cost of operation and maintenance to be paid and incur by the Discoms after energization:
Should there not be a separate tariff structure or a discount/rebate for a Single Point Consumer and Bulk Supply Consumer who is taking supply of electricity from Discoms of the State through Independent Feeder?
In my view a lower tariff should be payable by a Single Point Consumer and Bulk Supply Consumer who is taking supply of electricity through Independent Feeder from Discoms of the State, as Discoms play no role in addressing and redressing grievances, issues, concerns for supply of electricity through Independent Feeder, from point of supply till the place of consumer. Is the Discom not saving its operational and other associated cost for Independent Feeder in same regard, which it should have incurred, had the supply not through Independent Feeder? and accordingly should pass on all such saving to a Single Point Consumer and Bulk Supply Consumer who is taking supply of electricity through Independent Feeder from Discoms of the State in the form of either lower tariff or by way of discount/rebate.
The provisions of the Regulations 4.10 of the “The Haryana Electricity Regulatory Commission (Duty to supply electricity on request, Power to recover expenditure incurred in providing supply and Power to require security) Regulations, 2016” says that after energization All equipment except the meter (if supplied by the applicant), notwithstanding that whole or a portion thereof has been paid by the consumer, upon energisation, shall become the property of the licensee and the licensee shall maintain the same without claiming any operation and maintenance expenses, including replacement of defective/damaged material/equipment from the consumer.
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Warranty /Guarantee of such equipment shall also stand transferred to the licensee. The distribution licensee shall have the right to use it for the supply of electricity to any other person by tapping or otherwise except if such supply is detrimental to the supply to the consumer already connected therewith and subject to the provision under Regulation 4.8.2 (iii).
Further, the provisions of the Regulations 4.4 and 4.5 of the “The Haryana Electricity Regulatory Commission (Duty to supply electricity on request, Power to recover expenditure incurred in providing supply and Power to require security) Regulations, 2016” says that:
“4.4 The licensee shall bear the cost of such strengthening, augmentation, up-gradation and extension of the distribution system to meet the existing demand and future expected growth of demand through its annual revenue requirements (ARR) and such cost shall be allowed to be recovered through tariff after prudence check by the Commission. However, for individual consumers, the provision of Regulation 4.6 shall apply.”
“4.5 The licensee shall also not claim any payment or reimbursement from the applicant for any expenditure incurred or to be incurred by the licensee in terms of or under any scheme approved by the Commission or when such expenditure is otherwise allowed to be recovered through tariff by the licensee as a part of the revenue requirements of the licensee.”
I am a resident of a group housing society and is a consumer under option – 1 of the Single Point Supply Regulations, 2013 and supply of electricity is through an Independent Feeder. There are regular faults, break down, outages in supply and many of such faults, break down, outages are lasting for more than 24 hours. The said sub-division is unable to provide any service to fix and rectify faults, break down, outages within permissible time limit under Standard of Performance Regulations, 2004. It appears that neither the sub division has infrastructure nor staff to deal with this situation and therefore the sub division has accordingly not taken over the maintenance of independent feeder till date since energization of the independent feeder in the year 2014 and operation and maintenance of the same is still with the housing society. The housing society has employed staff, hired equipment, bought equipment to detect and rectify faults, break down and outages and incure monthly cost in same regard which should have been ideally to be born and paid by the said sub division.
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As a consumer, my recommendation is that the discom should pay the amount back to the housing society on monthly basis, which such housing society has incurred in identification, fixing and rectification of power faults, break down and outages for uninterrupted supply of electricity to the housing society:
1. Monthly salary of employed staff.
2. Hiring charges of equipment needed to detect and fixing of faults, break down and outages.
3. Service charges, commission paid to any one for taking any such service.
4. Cost of equipment purchased if damaged and replaced.
5. Any other amount paid to detect and rectify faults, break down and outages.
6. Isn’t it is the duty and responsibility of the Discoms to maintain the line free from any fault, break down and outages and pay for it. Why, the housing society needs to pay charges as mentioned above one in the form of Tariff and another in the form of charges/purchase to get faults, break down, outages fix.
7) No provisions/allowance in tariff for line and distribution loss for Independent Feeder consumer:
When there is only one consumer connected to an Independent Feeder, then meter reading and billing shall be done as per units recorded at power house and not as per units recorded at consumer place, unlike when there is more than one consumer connected to an Independent meter, meter reading and billing shall be done as per units recorded at consumer place. so who shall be bearing up the losses for line, transmission, distribution if there is only one consumer connected to an Independent Feeder. There should be either a % rebate, relief in units recorded or should be a separate tariff for Independent Feeder consumer worked out after considering the losses.
8) Provisions, Rules and Regulations of applicability of Municipal Tax and Electricity Duty:
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The Commission while announcing tariff for FY 2018-19, in the footnotes of tariff order, should also mention provisions, rules and regulations of applicability of Municipal Tax and Electricity Duty on various consumers. The Municipal Tax and Electricity Duty may not be applicable and payable by all consumers in all cases and situation. So to not to get charge excessively in the name of Municipal Tax and Electricity Duty when not applicable and payable, I would suggest that the Commission should also describe clearly in tariff structure, the rules and regulations of applicability of Municipal Tax and Electricity Duty and in what all cases both are payable as well as not payable.
9) Applicability of Fuel Surcharge Adjustments (FSA) from first month itself of a financial year:
Will Fuel Surcharge Adjustments (FSA) be payable from first month itself of new financial year starting from April 2018 onwards? When Commission approves tariff for a financial year, does that tariff is not determined and approved by the commission on the basis of right projection of cost and revenue, which results into FSA become payable from first month itself of a financial year? It is understandable that projection may go wrong at later stage of a financial year due to various unforeseen circumstances but not at first month itself of a financial year and also not at the time of approving tariff of a financial year.
10) Can Fuel Surcharge Adjustments (FSA) be merged with tariff and not to be payable separately:
I would suggest Commission to consider this proposal of merging and combining of FSA with tariff and approve tariff accordingly for Fy 2018-19, with clearly mentioning in tariff order that no FSA is applicable and payable for tariff mentioned in tariff order. This will I think save from many of ongoing concern and issue related to FSA.
11) Discoms are liable to pay compensation as per the provisions of the Haryana Electricity Regulatory Commission (Standards of Performance for the Distribution Licensee) Regulations, 2004:
The foot-note of the tariff order should say that Discoms of the state are liable to pay compensation to its consumer in accordance of the provisions of the Haryana Electricity Regulatory Commission (Standards of Performance for the Distribution Licensee) Regulations, 2004. I believe, currently, in the lack of
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awareness neither the consumer demands nor the Discoms pays any compensation/penalty to its consumers.
12) Applicability of minimum month charge (MMC) and when applicable how it should be calculated and charged:
The tariff order should specify the methodology of charging minimum month charge (MMC) from a domestic category consumer. Currently in the absence of it, there is ambiguity in charging MMC as to in what all condition and situation it is applicable and when applicable, what all it includes?
The Commission should mention in the tariff order that when minimum month charge (MMC) is applicable in any case, only minimum month charge (MMC) is payable and no charges such as FSA, Electricity Duty and Municipal Tax is payable. Consumptions of units have no relevance when minimum month charge (MMC) is applicable in any case.
I have mentioned a situation and examples below to clarify in the tariff order by the Commission that when minimum monthly charge (MMC) is applicable, which example is correct one to charge and levy minimum monthly charge (MMC). Is it example -1, or example -2, or example – 3, or example – 4?
Unit 100 Units in a month Consumption: Load 7 KW Tariff Rs. 2.70/ Unit upto 50 units and Rs. 4.50/Unit above 50 Units 360.00 FSA Rs.0.37/Unit upto 50 units and Rs. 0.37/Unit above 50 Units 37.00 Municipal Tax 0.05/Unit 5.00 Electricity Duty 0.10/Unit 10.00 Total Bill 412.00 MMC Rs. 115 upto 2 Kw and Rs. 70 above 2 Kw 580 In the above case, MMC is applicable as it is coming out to more than total bill of a month based on consumption, which example below is correctly describe to charge for electricity consumption of a month when MMC is applicable:
Example-1 Example-2 Example-3 Example-4 Tariff - - - 360.00 FSA 37.00 - - 37.00 Municipal Tax 5.00 5.00 - 5.00 Electricity Duty 10.00 10.00 - 10.00 Total A 52.00 15.00 - 412.00 MMC (B) 580.00 580.00 580.00 - Grand Total (A+B) 630.00 595.00 580.00 412.00
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13) Applicability and Non-Applicability of minimum monthly charge (MMC) in certain condition and is there a need to have minimum monthly charge (MMC) when there is consumption of electricity but less than minimum monthly charge (MMC)
The tariff order should specify in what all conditions minimum monthly charge (MMC) is applicable and in what all conditions it is not applicable. Is minimum monthly charge (MMC) applicable in all cases irrespective of consumption of units or there is exemption in applicability and charging of it. For example, (a) A consumer is energy conservative and not consuming electricity upto MMC and (b) Another consumer is having solar system installed and not consuming electricity upto MMC. Are in both cases, the consumer is liable to pay minimum monthly charge (MMC) or only for the units consumed which is less than minimum monthly charge (MMC)? By enforcing applicability of minimum monthly charge (MMC) in both the examples above, is Commission not encouraging both the consumer to use / waste more and more consumption of electricity, so that they do not end up paying minimum monthly charge (MMC). Is the minimum monthly charge (MMC) not applicable only in the cases when there is Nil consumption of electricity in a particular month?
Reply of DISCOMs
1) Comments to Objection No 1:
The query does not pertain to the Nigam.
Comments to Objection No 1(A):-
In this regard, it is submitted that the ARR has been prepared on the basis of actuals, wherein the foreseen expenses and revenue have been projected. Nigam has requested to the Hon’ble Commission vide petition HERC/PRO-83 of 2017 to continue with the current levels of tariff in order to meet out the revenue requirement of the Nigam for the concerned financial year and the basis of projections has already been submitted to the Commission. On finalisation of actual data, the profit or loss of the Discom have been pass on in the subsequent year tariff.
Therefore, there is no merit in the contention of the Objector to reduction in tariff.
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1) Comments to Objection No 2:-
The query does not pertain to the Nigam.
2) Comments to Objection No 3:-
It is submitted that DHBVN has already provided relevant response(s) to all the queries/objections raised by the objector, time to time.
3) Comments to Objection No 4:-
It is submitted that under HERC Regulations and Electricity Act 2003, State Regulatory Commission have exclusive powers to determine the tariff for different categories of the consumers availing electricity in the jurisdiction of the state. Thus, tariff approved by the HERC is final and binding – it is not permissible for the licensee, utility or anyone else to charge a different tariff. No tariff can be implemented unless approved by the regulator.
As, determination of tariff is within the prerogative of Hon’ble Commission, therefore it is submitted that the Commission may review the objection and if find it pertinent, issue suitable directions.
4) Comments to Objection No 5:-
The reply to the objection is already given above; therefore the same is not repeated for the sake of brevity.
5) Comments to Objection No 6:-
There is a provision of separate tariff structure for the Bulk Supply, as determine by HERC, which is at the lower side of the tariff within the consumer category.
The Nigam is taking care of the Operation and Maintenance activity of its infrastructure, as per the guideline(s) of the Hon’ble commission.
6) Comments to Objection No 7:-
The reply to the objection is already given above under comment of objection No. 4, therefore the same is not repeated for the sake of brevity.
7) Comments to Objection No 8:-
It is submitted that the tariff charged to consumer in addition to other charges are levied as per the direction given by the Hon’ble Commission under Note no. 10,
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11 and 16 specified in Clause 4.3 (Method to address Projected Revenue Gap) of Chapter 4 of Tariff Order for FY 2017-18. The relevant part of above specified Note is reproduced as under:
“Clause 4.3 (Method to address Projected Revenue Gap)
Notes:
10. In addition to the tariff as above, the Discoms shall levy FSA as per HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012. 11. The above tariff does not include Electricity Duty, Municipal Tax and FSA. 16. The Electricity Duty, Municipal Tax and FSA shall be charged at kWh basis…”
Therefore in light of the above, Municipal Tax and Electricity Duty are charged in addition to the tariff on those consumers having particular amount of energy consumption in a particular billing cycle. However, as per Section 62 of the Electricity Act, 2003, determination of tariff is prerogative of Hon’ble Commission, therefore it is submitted that the Commission may review the above solicited case and shall issue the suitable directions in regard to the applicability of above.
The Nigam is charging Municipality Tax and Electricity Duty form the consumers as per the guidelines issued by various competent authorities and subsequently transfer the collected Tax/Duty.
8) Comments to Objection No 9:-
As per the HERC MYT Regulations, 2012 the distribution licensees shall recover FSA amount on account of increase in fuel and power purchase costs from the consumers on a quarterly basis, so as to ensure that FSA accrued in a quarter is recovered in the following quarter without going through the regulatory process. However, in past, whenever the FSA amount is more, the recovery spills over a period of 3-4 years(to reduce the sudden burden on the consumers) and when the FSA was levied after the end of the year, HERC had allowed the recovery of FSA over a span of 3-4 years; though the DISCOM paid the entire cost of power purchase on a regular basis during the year itself.
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Thus, in continuation to above, the charging of FSA from first month itself is not accounting for that current financial year but is on the account of spil over of FSA amount of previous unrecovered amount.
9) Comments to Objection No 10:-
FSA charges are on account of variation in fuel prices,which is quite difficult to be projected at the start of a financial year. Further, DHBVN apply Fuel Surcharge Adjustment as a pass-through cost to its consumers in accordance with HERC MYT Regulations, 2012 on a quarterly basis.
As it is not possible to predict the FSA charges while determining the tariff for a financial year, FSA cannot be merged with the tariff.
Also, the separate head of FSA make the tariff more transparent for the consumers.
10) Comments to Objection No 11:-
It is submitted that the information in respect of Standard of Performance has already been uploaded at Nigam’s website from time to time in line to the HERC (Standards of Performance for the Distribution Licensee) regulations, 2004.
11) Comments to Objection No 12:-
It is submitted that the Nigam is charging Minimum Monthly Charge (MMC) to Domestic Supply Category consumers as per the standing directions of the Hon’ble Commission in the tariff order notified date 11th July, 2017. As per the clause 4.3 of Chapter 4 (Distribution and Retail supply tariff determination for FY 2017-18) of aforesaid tariff order, Nigam is currently charging Minimum Monthly Charges to domestic supply consumers having consumption up to 100 units per month with the tariff of Rs.115 up to 2kW connections and Rs.70 per kW for connection having connected load above 2kW. Whereas the domestic consumers those who consume more than 100 units are being charged with the rate of Rs.125 up to 2kW connected load and Rs.75 per kW for consumers having connected load above 2kW.
Further, in case, when consumption of electricity in any particular billing period is recorded for the domestic category consumer than the other charges are levied as per the direction given by the Hon’ble Commission under Note no. 10, 11 and 16 specified in Clause 4.3 (Method to address Projected Revenue Gap) of
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Chapter 4 of above mentioned Tariff Order. The relevant part of above specified Note is reproduced as under:
“Clause 4.3 (Method to address Projected Revenue Gap)
Notes: 10. In addition to the tariff as above, the Discoms shall levy FSA as per HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012. 11. The above tariff does not include Electricity Duty, Municipal Tax and FSA. 16. The Electricity Duty, Municipal Tax and FSA shall be charged at kWh basis…” Therefore, in light of the above, charges like FSA, Municipal Tax and Electricity Duty will be charged additional to the MMC charges on domestic category consumers having particular amount of energy consumption in any billing cycle. However, as per Section 62 of the Electricity Act, 2003, determination of tariff is prerogative of Hon’ble Commission, therefore it is submitted that if find relevent, the Commission may review the above solicited case and shall issue the suitable directions in regard to the applicability of MMC and other charges.
12) Comments to Objection No 13:-
It is submitted that under HERC Regulations and Electricity Act 2003, State Regulatory Commission have exclusive powers to determine the tariff for different categories of the consumers availing electricity in the jurisdiction of the state. Thus, tariff approved by the HERC is final and binding – it is not permissible for the licensee, utility or anyone else to charge a different tariff. No tariff can be implemented unless approved by the regulator.
As, determination of tariff is within the prerogative of Hon’ble Commission, therefore it is submitted that the Commission may review the objection and if find it pertinent, issue suitable directions
Further, reply submitted by UHBVNL, vide memo no. Ch- 03/SE/RA/N/F-PRO-3 of 2018, dated 25.06.2018, in response to the Petition no. HERC/PRO-3 of 2018, filed by Sh. Pankaj Bhalotia, is reproduced below:-
S. Observations Reply / comments no
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S. Observations Reply / comments no 1. The Minimum Monthly Charges is applicable MMC is charged in cases where the and payable by a domestic supply category sale of power amount is less the consumer in two situations as described minimum monthly charge. below:- (a) When the consumption of electricity of a particular billing period is Zero (0) (b) When the consumption of electricity of a particular billing period is less than minimum monthly charge. 2. In situation (a) above where consumption of FSA, Electricity Duty, MC tax are electricity is Zero (“0”) for a particular billing computed based on the recorded period, a domestic supply category consumer consumption, if the consumption is 0, needs to pay only the Minimum Monthly the corresponding ED, Taxes etc being Charges (MMC) according to its connected based on consumption are 0. MMC is load and no other charges whatsoever such as the minimum amount payable and is FSA, electricity duty, municipal tax etc is limited to a charge based on the payable in this case, because the consumption connected load and the consumption of electricity is Zero (“0”). slab of the consumer as specified in So, when consumption is Zero (“0”) for a the Tariff Order. These charges are particular billing period, no charges levied to recover the cost of whatsoever is payable by a domestic supply infrastructure, its operation and category Consumer other than Minimum maintenance cost that is incurred by Monthly Charges (MMC) in accordance with the Utility whereas the duty and taxes his/her connected load. No FSA, No are State levies and as per the Electricity Duty, No Municipal tax. Only MMC relevant regulation are recovered is payable. corresponding to the number of electricity units (kWh) consumed. Hence Further, if the above understanding is only MMC is payable in cases where correct, and only MMC is levied as per the consumption is nil. connected load, then at what rate it should The rate at which MMC is levied is be levied, because a domestic supply approved by the Commission in the category consumer has three category of ARR/Tariff Order of the DISCOMs for tariff i.e. category-I, category-II or category-III the relevant year. As approved in the and each category has different rate MMC. ARR/Tariff order for FY 2017-18, in This has nowhere clarified by the case of Domestic Consumer falling in Commission. the slab of 0-100 units / month, the mmc is Rs 115 per Kw per month for connected load upto 2 kw and Rs 70 per Kw of Connected load exceeding the 2Kw. For the consumers falling in
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S. Observations Reply / comments no the consumption slab of above 100 units per month, the MMC is Rs 125 per kw per month for Connected Load upto 2 Kw and Rs 75 per Kw per month of Connected load exceeding the 2 Kw limit. The MMCs is being recovered accordingly. 3 In situation (b) above where consumption of Situation (b) is different from (a) electricity is less than minimum monthly charge because in the case of (a) the rate of (MMC) for a particular billing period, the in this taxes are multiplied by 0 leading to nil case a domestic supply category consumer not ED, FSA and MC tax. Thus, the only needs to pay Minimum Monthly Charges domestic consumer needs to pay only (MMC) but also needs to pay FSA, Electricity MMC charges. Duty, Municipal Tax along with MMC and the reason for the same is that there is consumption of electricity noted during billing period and accordingly not on MMC, the domestic supply category consumer needs to pay FSA, Electricity Duty and Municipal Tax etc. also.
So, when consumption is less than minimum monthly charge (MMC) for a particular billing period, a domestic supply category consumer not only needs to pay Minimum Monthly charges (MMC) in accordance with h is/her connected load, such domestic supply category consumer also needs to pay FSA, Electricity Duty and Municipal Tax over and above MMC for his/her consumption of electricity.
Once there is consumption of electricity for a particular billing period, a domestic supply category consumer needs to pay FSA, electricity duty and municipal tax for his/her unit of consumption of electricity along with MMC.
The situation of (b) is different from (a), because in (a) there is no consumption of
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S. Observations Reply / comments no electricity, whereas in (b) there is consumption of electricity and thus FSA, electricity duty and municipal tax become payable along with MMC, whereas (a) needs to pay MMC only.
4 Is there not contradict position/view of charging There is no contradiction in situation (a) tariff in situation (a) and (b), where (a) only and (b). The logic is apparent when it pays MMC, whereas (b) needs to pay MMC, is considered that Nil consumption FSA, electricity duty, municipal tax. multiplied by any rate is Nil. 5 Does a domestic supply category consumer Situation (a) and (b) are not different not require to pay minimum monthly charges considering the algebraic multiplication (MMC) only when applicable in both the of quantities with rates. situation (a) and (b). Once MMC is applicable, whether you are in situation (a) or (b), only MMC is payable and no other charges such as FSA, Electricity duty, Municipal Tax etc is applicable and payable.
6 Should not consumption of Consumption of The reasons for levying of FSA, ED electricity or no consumption of electricity have and MC tax are different as they no relevance of charging FSA, electricity duty, correspond to the consumption made municipal tax when Minimum Monthly Charge by the consumer whereas the MMC (MMC) is applicable and payable for a applicable is levied on account of particular billing period. infrastructural costs. Since the nature of two is different the relevance thus arises. 7 Does by charging FSA, electricity duty and The charging of FSA, Electricity duty municipal tax etc and above minimum monthly and MMC tax over and above the charges (MMC) in situation (b), the definition MMC does not contravene the of the terms “minimum charge” as given in impugned regulation because FSA is an Regulation 2.3 (44) of “The Haryana Electricity adjustment of variation of fuel cost Regulatory Commission (Electricity Supply which is duly approved by the Hon’ble Code) Regulation 2014, has not been Commission, electricity duty is the duty contravened, which says that that “minimum payable to the State Government and charges” means the minimum monthly charge Municipal tax to the Local Government as approved by the Commission in the etc as these are not retained by the prevailing tariff order for the licensee. NIGAM.
8 In my case, some of the month of year, my In your case the MMC along with FSA, consumption of electricity is less than the ED and MC tax are levied based on
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S. Observations Reply / comments no minimum monthly charge (MMC) and in all the rates and tariff approved by the such cases I get electricity bill which has Hon’ble Commission. charges as MMC, FSA, electricity duty and municipal tax. So do I have to pay in all such cases MMC + FSA + electricity duty + municipal tax or only MMC as discussed in foregoing paragraph. 9 Another way to avoid MMC in situation (b) is The only way to get the connected to get the connected load reduced, but I can- load reduced is by reducing the not do so because of mine having Single electrical installations to such a level Point Supply and bulk supply domestic that the total connected load falls to connection. The load connected to my flat is the desired level i.e. 1 KW and submit fairly calculated and allotted, so can-not be a fresh test report which shall be reduced. approved by the SDO of the concerned office and subsequently the load in the system can be reduced. However, in your case the load connected to your flat and to all the single point supply consumers in your society has contributed to determining the infrastructure installed by the NIGAM for which the MMC is charged.
10 Does by not charging FSA, electricity duty and Being a conscious consumer it is the municipal tax etc over and above MMC in duty of everyone to conserve electricity. situation (b), it is forcing an energy conserving However, in order to recover the person to consume more electricity so that he infrastructure cost the MMC is levied can avoid MMC. and the FSA, ED and MC tax have their own cause for levy corresponding to the consumption. 11 In an example below for situation (b) , isn’t In the three examples provided for example – 3 is correct for charging tariff when situation (b), the correct example is consumption of electricity for a particular billing example 1. However, the total electricity period is less than minimum monthly charges bill of Rs 412 is not to be compared (MMC). with MMC rather the consumption charges i.e. Rs 360 + Rs 37 (Energy Units 100 units in a charges + FSA) is to be compared with Consumption: month the MMC of Rs 580.Moreover, it may Load 7KW be noted that as per the gazette Notification no. Leg. 34/2017 and Leg.
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S. Observations Reply / comments no Tariff Rs 2.70/unit 3360. 35/2017 issued by GoH, both dated upto 50 units 00 23.11.2017, “The Haryana Municipal and Rs Corporation (Second amendment) Act, 4.50/unit 2017 and “The Haryana Municipal above 50 unit (Second amendment) Act, 2017, the municipal tax is recovered as 2% of FSA Rs 0.37 per 337.0 the amount of electricity bill (energy unit 0 Charge + fixed charge + FSA). Municipal 0.05/unit 55.00 Tax
Electricity 0.10/unit 110.0 Duty 0
Total Bill 4412. 00
MMC Rs 115 upto 5580. 2kw and Rs 00 70 above 2kw
In the above case, MMC is applicable as it is coming out to more than total bill of a month based on the consumption, which example below is correctly describe to charge for electricity consumption of a month when MMC is applicable:
Example Examp Examp 1 le 2 le 3 Tariff - - - FSA 37.00 - - Municip 5.00 5.00 - al Tax Electric 10.00 10.00 - ity Duty Total 52.00 15.00 - MMC 580.00 580.00 580.00 Grand 632.00 595.00 580.00 Total
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S. Observations Reply / comments no
Isn’t in above case total electricity bill which is of Rs 412.00 to be compared with minimum monthly charge (MMC) of Rs 580.00 and since MMC is coming out more than the bill of the month only MMC of Rs 580.00 is payable and no other charges such as FSA, electricity duty and municipal tax etc is payable which has been mentioned in example-3, isn’t FSA part of tariff?
Further, reply submitted by UHBVNL, vide memo no. Ch- 03/SE/RA/N/F-PRO-5 of 2018, dated 29.08.2018, in response to the Petition no. HERC/PRO-5 of 2018, filed by Sh. Pankaj Bhalotia, is reproduced below:-
With reference to your letter dated 01.06.2018, so far as excess recovery of FSA of Rs.16.02 crore is concerned, it is stated that the Hon’ble Commission in FSA Order dated 03.03.2017 observed that any variation in the power purchase cost for FY 2016-17 will be adjusted in truing up exercise of ARR of FY 2016-17. The relevant extract of the FSA Order dated 3rd March 2017 is reproduced as under:
“…Further, any aberration in amount of power purchase cost for the FY 2016- 17 that may arise shall be taken care of in the ARR/Tariff true-up exercise for the FY 2016-17. Hence, as of now, the FSA recoverable from the electricity consumers other than A.P. has been estimated at Rs. 828.40 Crore…” However on the basis of actual figure of FY 2017-18, an amount of Rs.1280.85 crore is pending to be recovered from Non-AP Consumers. Therefore, the excess recovery of amount of Rs.16.02 crore has already been adjusted against FSA of subsequent quarters of FY 2017-18. Thus, excess recovery of Rs.16.02 crore made beyond the FSA amount as specified by HERC in FSA Order dated 3rd March 2017 passed in case no. HERC/PRO-33 of 2015 and 35 of 2015 was adjusted against FSA accrued during FY 2017-18. Moreover, details pertaining to the accrual power purchase cost accumulated during each quarters of FY 2017-18 have been posted by Discoms under detailed calculations of levy of FSA on its website.
On the issue of recovery of FSA in the month of October, 2017, it is stated that As directed by the Hon’ble Commission in FSA Order dated 03.03.2017,
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Discoms have uploaded the details calculation for levy of FSA for 1st and 2nd Quarter of FY 2017-18 on their respective websites. Further, in compliance to the Regulation- 66 of HERC MYT Regulations, 2012 Discoms have submitted the detail FSA calculations for 1st and 2nd Quarter of FY 2017-18 to Hon’ble Commission through vide letter No. Ch-20/SE/RA/N/F-54/Vol-XIII dated 21.08.2017. In the above submission, Discoms have also requested to the Hon’ble Commission that recovery of FSA of 1st and 2nd Quarter shall be allowed to be recovered alongwith FSA of 2nd Quarter of FY 2017-18 at existing rate of 37 paise per unit. The same was permitted to the Discoms through HERC vide Memo No. 2270/HERC/Tariff dated 28.09.2017. Hence, Discoms have accordingly charged FSA in the subsequent quarter.
So far as issue regarding non-recovery of FSA as per Regulation-66.11 of MYT Regulations is concerned, attention is drawn to Regulation-66.1 of MYT Regulations, which is reproduced as under:
“The distribution licensees shall recover FSA amount on account of increase in fuel and power purchase costs from the consumers on a quarterly basis so as to ensure that FSA accrued in a quarter is recovered in the following quarter without going through the regulatory process i.e. FSA for the quarter “July to September” is recovered in the following quarter “October to December.”
Thus, the recovery of FSA for 2nd quarter i.e. “July to September” can be recovered in 3rd quarter i.e. “October to December”. For the recovery of FSA of 1st quarter i.e. “April to June” was made along with FSA of 2nd quarter as per approval granted by Hon’ble HERC vide letter dated 28.09.2017.
In order to reduce the burden of FSA of 1st and 2nd quarter, Discoms requested to Hon’ble Commission to allow recovery of FSA for 1st Quarter alongwith FSA of 2nd Quarter of FY 2017-18. The HERC vide letter dated 28.9.2017 granted permission. Thereafter, Discoms issued necessary instructions for recovery of FSA for 1st and 2nd Quarter of FY 2017-18. After approval from Hon’ble Commission, Discoms have charged FSA of 37 Paise per unit to the Consumers in 3rd quarter of FY 2017-18. Discoms have continued the recovery FSA at 37 paise per unit from 3rd Quarter of FY 2017-18 to till date. The permission for continuing FSA at existing rate has been sought from the Hon’ble Commission at the time submission of FSA Calculation for the relevant quarters. Therefore, as there was no change in the existing FSA, therefore, Sale Circular No.U-46/2017 is still in vogue. Discoms have
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Commission’ View
The Commission has examined the Petition No. HERC/PRO-3 of 2018 regarding the levy of MMC and observed that levy of Electricity Duty & Municipal Tax are the State object and not within the perview of the Commission. Further, the queries raised by Sh. Pankaj Bhalotia has been correctly addressed by UHBVNL in point no. 11 of its reply.
Regarding, Petition No. HERC/PRO-5 of 2018 regarding the levy of FSA, the reply of UHBVNL reproduced above clarifies the doubts raised by Sh. Pankaj Bhalotia.
Petition Nos HERC/PRO-3 of 2018 and HERC/PRO-5 of 2018 are accordingly disposed of.
2.3.5 Objections filed by Behalf of ACME CLEANTECH SOLUTIONS PRIVATE LIMITED
1) After filing of the APR & ARR Petition, UHBVN by way of Public Notice invited suggestions/objections/comments from stakeholders and interested persons on APR & ARR Petition. In furtherance thereof, Acme Cleantech Solutions Private Limited (`ACME`) is filing the instant representation seeking creation of a new tariff category for Electric-Vehicle (`E-Vehicle`) charging stations/battery swapping infrastructure in Haryana which will facilitate promotion and use of E- vehicles (‘Representation’). A competitive and reasonable tariff for E-Vehicle charging stations/battery swapping infrastructure will incentivize companies to invest in manufacturing and operation of E-vehicles and related infrastructure. .
2) ACME is a leading solar power developer and has established grid-connected solar power plants across various states in India. At present, ACME has an existing portfolio of 1.8 GW Solar Photo Voltaic Projects including but not
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limited to 15 MW in Gujarat, 275 MW in Madhya Pradesh, 25 MW in Odisha, 30 MW in Chhattisgarh, 310 MW in Andhra Pradesh, 490 MW in Telangana, 104 MW in Punjab, 50 MW in Uttarakhand, 30 MW in Uttar Pradesh, 25 MW in Bihar, 260 MW in Karnataka and 200 MW in Rajasthan. ACME is proactively involved in research & development of new technologies that are energy efficient, environment friendly and cost-effective. In furtherance of ACME’s objective to develop sustainable solutions, it has also established a Lithium Battery manufacturing facility at Rudrapur, Uttarakhand. In May 2017, ACME established India’s 1st Battery Swapping & E-vehicle Charging Station for Ola & Mahindra Electric for their pilot project in Nagpur, Maharashtra.
3) Pursuant to the Government’s ‘National Electric Mobility Mission Plan 2020’, ACME is considering setting up of E-vehicle charging stations in, inter alia, the state of Haryana. An E-vehicle is essentially powered through electricity from off-vehicle sources (plug-in mechanism) or a swappable battery, the power for charging the E-vehicle/swappable battery will have to be procured from UHBVN. This power, if procured under any of the existing tariff categories, will not be viable and will be a significant expense for the entity setting up the E- vehicle charging stations/owners. As such, it is imperative that this Ld. Commission create a new tariff category for E-vehicle charging stations/ battery swapping infrastructure for, inter alia, for the following reasons:
3.1 Initiatives across the world for promotion of E-Vehicles
India - i) National Electric Mobility Mission Plan 2020 –
The Government of India (`GoI`) is dedicated to the promotion of E-vehicles and has undertaken substantial policy measures to ensure that the dependency on conventional vehicles is reduced. In 2012, GoI announced the ‘National Electric Mobility Mission Plan 2020’ (`NEMMP`) as one of its most important and ambitious initiatives to introduce a paradigm shift in the automotive and transportation industry in the country. NEMMP provides a concrete framework to promote hybrid and electric mobility in India through a combination of policies aimed at gradually ensuring that by 2020, there are approximately 6–7 million electric/hybrid vehicles in India. The NEMMP scheme has been developed keeping in mind the following:
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a) Demand side incentives to facilitate acquisition of hybrid/electric vehicles;
b) Promotion of Research & Development in technology including battery technology, power electronics, motors, systems integration, battery management system, testing infrastructure, and ensuring industry participation in the same;
c) Promotion of E-vehicle charging infrastructure;
d) Supply side incentives;
e) Encouraging retro-fitment of on-road vehicles with hybrid kit.
The objective behind introduction of NEMMP is to achieve national fuel security by promotion of hybrid and E-vehicles in the country through fiscal and monetary incentives. NEMMP recognizes that there are significant deficiencies such as infrastructural support that have affected the growth of the E-vehicle industry in India. Hence, there is a need for regulatory and government authorities to take concrete steps for promotion of this industry. The relevant extract of the NEMMP is reproduced herein below:-
“7.1.4. As infrastructural support is essential to develop a strong electric vehicle market, countries across the world are providing subsidies to strength the electric vehicle charging infrastructure. This includes support for charging stations and battery swapping stations...” ii) Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles India scheme -
In 2015, GoI introduced the ‘Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles India’ scheme as part of the NEMMP, to promote eco- friendly vehicles across the country (`FAME Scheme`). FAME seeks to provide financial incentives to support & develop the hybrid/E-vehicle market and essentially focuses on 4 specific areas i.e. (i) Technology Development; (ii) Demand Creation; (iii) Pilot Projects; and (iv)Charging infrastructure. FAME Scheme urges State Governments, non-government bodies and concerned industry players to actively develop the technology for conscious use of eco-friendly vehicles. The Scheme aims to create market demand by offering financial incentives to all vehicle segments. It is pertinent to point out
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that FAME Scheme is one of the first schemes to place importance on development of adequate public charging infrastructure to provide confidence, assurance and awareness to E-vehicle consumers. iii) Report of the Forum of Regulators titled ‘Study on Impact of Electric Vehicles on the grid’
The Forum of Regulators (`FoR`), a body constituted under Section 166 of the Electricity Act 2003 by the Central Government and comprises of the Chairperson of CERC and Chairpersons of the other State Regulatory Commissions, in September 2017 published a report titled ‘Study on Impact of Electric Vehicles on the grid’ (`FoR Report`). The FoR Report assesses the techno-economic impact of large scale integration of E-vehicles on the grid network and an appropriate regulatory framework to facilitate the roll out of E- vehicles in the country. The FoR Report, inter alia, recognizes the following:
i. In the near future, there will be a substantial increase in E-Vehicles and that the E-vehicle business model can be implemented under the existing statutory framework;
ii. E-Vehicle users are consumers of the distribution licensee;
iii. There are 3 business models that can be adopted within the existing regulatory framework for E-vehicle charging infrastructure. The relevant extract of the Forum of Regulators Report is reproduced herein below:
i. Direct by Discom- Discoms creating EV charging infrastructure through their own investment and selling electricity to EV owners;
ii. Franchise model- contractual agreement between Discoms and third parties, allowing EV charging infrastructure to be set-up by third- parties and resale of electricity to EV owners;
iii. Battery swapping stations- aggregation of demand through battery swapping stations.
2) Initiative by foreign countries for promotion of E-vehicles and charging infrastructure-
i. Foreign countries through government intervention and regulatory support have introduced various financial incentives for consumers and automobile makers alike to promote development and use of E-vehicles. Such measures
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have encouraged the automobile industry to innovate their technology and consumers to adopt and incorporate sustainable vehicular practices. ii. In this regard, it is pertinent to point out a few measures undertaken by utilities and regulatory authorities in the United States of America (`USA`) for promotion of E-vehicles and charging infrastructure:
a. E-vehicle purchase incentives introduced by utilities such as Burlington Electric Department, Green Mountain Power and Vermont Electric Coop;
- Burlington Electric Department: Rebate of $1200 on purchase or leave of a new all E-vehicle or rebate of $600 on a plug-in Hybrid Electric Vehicle priced below $50,000;
- Green Mountain Power: Purchase rebate of $10,000 on new 2017 Nissan LEAF E-vehicles;
- Vermont Electric Coop: $200 bill credit for the purchase of a new or used plug-in electric vehicles.
b. Federal Tax Credits for purchase of e-vehicles upto $7,500 depending on the battery size;
c. Substantial investments in E-vehicle supply equipment. For example, Green Mountain Power owns and operates e-vehicle charging stations. Additionally, Green Mountain Power also provides for installation of e- vehicle supply equipment at its own cost and appoints a host (operator) who pays the cost to run electrical service by way of a monthly fee. Further Green Mountain Power also offers incentives for stations connected with solar rooftop.
d. The tariff structure adopted by various utilities for charging of E-vehicle also incentivizes consumers. Some utilities allow free charging at specific locations while others charge a monthly fee for their charging facilities. iii. Europe has been at the forefront for aggressive promotion of E-vehicles. The Norwegian Government has significantly promoted the growth of E-vehicles by adopting the ‘polluter pays principle’ in its car taxation system, whereby consumers with high emission cars are charged higher taxes and cars with
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low & zero emission are charged low taxes. As per the data published by the CERC Forum of Regulators Report, Norway has the highest share of E- vehicles per capita. A few other initiatives undertaken by Norway are outlined herein below:-
a) Extensive investment in public charging infrastructure;
b) Significant innovations in vehicle technology with a focus on lightweight automotive bodies instead of increasing the battery size and capacity;
c) Higher price of gas for consumers, since Norway does not subsidize gas prices and the same include significant federal taxes;
d) No purchase or import taxes;
e) Exemption from 25% VAT on purchase;
f) No charges on toll roads or ferries;
g) Free municipal parking and charging locations;
h) Exemption from registration tax for E-vehicles;
iv. The Government of France provides subsidies to its consumers upon purchase of all E-vehicles and plug-in hybrids with low CO2 emissions. In fact, the CERC Forum of Regulators Report states that France is the 2nd largest plug-in E-vehicle market in Europe and in October 2016, there were over 100,000 units of light-duty plug-in E-vehicles registered in France.
v. Japan has introduced schemes to provide higher subsidies for E-vehicles with the maximum subsidy limit set to $7700 per car. In addition to this, in China, the E-vehicles are exempt from acquisition/ excise taxes along with other financial incentives and are allowed waivers from license plate availability restrictions.
4.1.1 In view thereof, it is this Ld. Commission’s responsibility to provide support in the form of creation of a new tariff category that provides a viable tariff for entities such as ACME who are interested in setting up E-vehicle charging stations/battery swapping infrastructure.
4.2 Creation of a new tariff category for E-vehicles will assist in reduction of dependency on conventional fuels and address growing environment concerns
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4.2.1 As per the information published by the Department of Heavy Industries in the NEMMP, the automobile industry is amongst the fastest growing industries in India. It is expected that by 2020, India will be the third largest vehicle market in the world. It is estimated that the annual demand for passenger vehicles, commercial vehicles and two wheelers will be approximately 10 million, 2.7 million and 34 million units respectively. This increase in vehicle demand, will have a consequential impact in demand for conventional fuel. As per the data provided by NEMMP, the percentage of oil imported in 1997 was 57% of the total demand, by 2010, the quantum of import had increased to 85% and the total demand is expected to reach 92% by the year 2020.
4.2.2 In addition to the concern for the massive increase in fuel consumption by the automobile industry, there is also concern for the release of carbon emissions by use of conventional fuel. The CERC Forum of Regulators Report estimates that the Indian transportation sector accounts for one-third of the total crude oil consumed in the country, wherein 80% is consumed by road transportation alone. This means that the road transportation sector alone accounts for approximately 11% of the total carbon emissions.
4.2.3 In view of the afore stated, there is an urgent need for Regulatory Commissions and government authorities to aggressively promote usage of E-Vehicles by providing incentives such as reasonable tariff. Increased usage of E-Vehicles will lead to a substantial reduction in consumption of conventional fuels such as petrol and diesel and the consequential pollution.
4.3 Proactive measures undertaken by Delhi Electricity Regulatory Commission and Maharashtra Electricity Regulatory Commission in creation of a new tariff category for E-vehicles
4.3.1 The Ld. Delhi and Maharashtra Regulatory Commissions have taken the first steps towards conscious promotion of the Indian Government NEMMP.
4.3.2 The Delhi Electricity Regulatory Commission (`DERC`) by way of its Tariff Order dated 31.08.2017 (`DERC Tariff Order`) created a separate tariff category for charging E-Rickshaw/E-vehicles. The relevant extract of the DERC Tariff Order is reproduced herein below: 13 Charging Stations for E-Rickshaw/E-Vehicle on Single Delivery Point
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13.1 Supply at LT - 5.50 Rs./kWh 13.2 Supply at HT - 5.00 Rs./kVAh
4.3.3 The Maharashtra Electricity Regulatory Commission (`MERC`) by way of its Multi-Year Tariff Order dated 03.11.2016 for Maharashtra State Electricity Distribution Company Limited (`MSEDCL`) for the Aggregate Revenue Requirement of the third control period i.e. FY 2016-17, 2017-18, 2018-19 and 2019-2020 (`MERC MYT Order`) also determined a tariff for E-vehicle charging stations. The relevant extract of the MERC MYT Order is reproduced herein below:
“LT II: LT – Non-Residential or Commercial
LT II (A): 0 – 20 kW
(o) Electrical Charging Centres for Vehicles; provided that, in case the consumer uses the electricity for charging his own vehicle at his premises, the tariff applicable shall be as per the category of such premises. Fixed/Demand Wheeling Energy Consumption Slab Charge (Rs. per Charge Charge (kWh) month) (Rs./kWh) (Rs./kWh) LT II (A) 0-20 kW (i) 0 to 200 units per 235 1.18 6.09 month (ii) Above 200 units per month (only balance 235 1.18 9.32 consumption)
HT II: HT - Commercial
(o) Electrical Charging Centres for Vehicles; provided that, in case the consumers uses the electricity for charging his own vehicle at his premises, the tariff shall be as per the category applicable to such premises.
Rate Schedule Wheeling Charge Supply voltage level (Rs./kWh) 66 kV and above NIL 33 kV 0.09 22 kV or 11 kV 0.82
PLUS
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Demand/Fixed Charge and Energy Charge (for all Supply Voltage Levels) Consumer Category Demand Charge Energy (Rs./kVa/month) Charge (Rs./kWh) All units 235 11.35 TOD Tariffs (in addition to above base tariffs) 2200 Hrs-0600 Hrs -1.50 0600 Hrs- 0900 Hrs & 1200 Hrs- 0.00 1800 Hrs 0900 Hrs- 1200 Hrs 0.80 1800 Hrs- 2200 Hrs 1.10
4.4 Benefits of creation of a separate tariff category for E-vehicles for the distribution companies of Haryana
4.4.1 The creation of a separate tariff category will incentivize entities to develop charging infrastructure or collaborate with other players in the industry to promote the E-vehicle industry which will generate additional revenue for UHBVN and other distribution companies of Haryana.
4.4.2 Setting up of E-Vehicle charging stations/battery swapping infrastructure will increase the demand for power and the distribution licensees can procure this excess power from renewable sources which will help these utilities in meeting their RPO.
5. In view of the afore stated, we request this Ld. Commission to create a new tariff category for E-vehicle charging stations/battery swapping infrastructure in the state of Haryana as the same will not only incentivize industry players to assist and supplement the government’s initiative for promotion of use of E- vehicles and related infrastructure (such as batteries, charging stations, battery storage solutions etc.) but will also address issues related to fuel security and growing pollution.
Reply of DISCOMs
It is submitted that the battery swapping infrastructure to service E-vehicle is a commercial activity and therefore the same must be kept in commercial category. The Hon’ble Commissions of Maharashtra, Delhi, Jharkhand and Punjab has also kept the charging of electric vehicles in the commercial category.
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The details of Category and applicable tariff for charging stations in different States has been given below:- S. State Category Tariff no Energy Charge Fixed Charge 1 Delhi Separate Supply at LT - 5.50 Rs./kWh Category Supply at HT- 5.00 Rs./kVAh 2 Punjab Commercial 5.00 / kVAh 3 Maharashtra Commercial Up to 200 Units 6.09 / kWh Rs 250/Month Above 200 Units 9.32 / kWh (In addition 0.91 / kWh is charge as wheeling charge) 4 Jharkhand Commercial 5.25 / kWh 60/Conn/Month 5 Andhra LT_ others 6.95/ kWh
Pradesh
Further, as per provision 62 of The Electricity Act, 2003, the Hon’ble Commission shall determine the tariff for a distribution company as per the provisions of the aforementioned act and its enabling Regulations. Therefore, the Hon’ble Commission may create a special category for battery swapping infrastructure to service E-vehicle similar to the Commercial NDS category or notify the charging activity in the NDS category.
It is also pertinent to mention that currently there are no such charging station in the state of Haryana and therefore no revenue impact must be considered while determining the gap between the Annual Revenue Requirement of the Discoms and the Revenue assessed, as considering the same will lead to inflation of the Assessed revenue, thereby, leading to reduction of the Annual Revenue Gap of the licensee.
In view of the above, it is requested to consider the above referred comments for the objections of M/s ACME Cleantech Solutions Pvt. Ltd. on ARR for FY 2018-19.
Commission’ View
The Commission has considered the objections raised and reply thereon filed by DISCOMs and will be considered while passing the Order.
2.3.6 Objections filed by Behalf of Haryana Strips Pvt. Limited
1. Levy of service connection charges for EOL in respect of Independent Feeder.
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That as per your Sales Circular no. D-29/2016, we understand that the SCC are to be recovered from consumer towards the cost of expenditure incurred in providing supply and power to consumer (Single Point). It is clearly mentioned that in case the consumer opts for execution of work on his own then the supervision charges calculated in accordance of estimated cost are to be recovered from consumer. Besides this, in case SCC calculated are more than the estimated costs of such work than the difference of the SCC and estimated cost would be borne by the consumer.
That Contrary to this, your Sales Circular no.D-12/2017, says that the admissibility of Independent Feeder is amended and the limit of Minimum Contract Demand has been reduced to 1000 KVA and the ceiling of 250 amps load on 1 lkv Independent Feeder has been withdrawn. It means the Independent Feeders are so designed to cater a load of more than 250 amps. and 7000 KVA.
That our earnest representation is to resolve the issue of Service Connection Charges (SCC) in case of incremental increase in the connected load from 2250 KW to 5000 KW on 11 KV Independent Feeders. As there is no extra cost involved for the further EOL except the cost of CT/PT, which is of course borne by the consumer. Therefore in such cases, it is requested that the SCC should not be levied on the consumer having Independent Feeder.
2. Dispaity in Industrial Power Tariffs and Charges with adjoining States.
That Haryana Strips Pvt. Ltd. Hisar requesting your good offices to resolve a major difference in Power Tariffs of our Haryana State as compared to adjoining States i.e. Punjab, Rajasthan, U.P. and Himachal Pradesh.
That The Induction Furnace factories which manufacture Ingots/Steel Sections from Steel Scrap (via Induction Furnace and Rolling Mill) are a major consumer of power i.e. power being close to 35% of our total conversion cost. Moreover, Steel products manufactured by us work in an environment where pricing is paramount (given the neutrality of quality and branding) with margins remaining tight.
That our only advantage being in Hisar is to cater to local markets, given that savings in transportation costs are our only means of sustenance and viability. However, owing to power tariffs in Haryana State being considerably more than adjoining States, our costings (and therefore pricing) of our products are rendered
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That Steel Units (based on Induction Furnace)like ours gives employment (directly and indirectly) to between 400-500 workers and staff each plus providing direct revenue (via GST i.e. our 3 Steel units with a combined turnover of 50.00 to 60.00 crores contributes 8.00 to 9.00 crores of GST per annum excluding direct taxes) to the State Exchequer.At this juncture, we find ourselves staring at operating losses and thus a having to possibly rethink on re-commencing/ continuing operations.
That the non-parity/difference in Industrial Tariffs and Charges with adjoining States i.e. Punjab, Rajasthan, U.P. and Himachal Pradesh is on 3 different heads, namely,
(a) Power Tariff
Haryana Punjab Rajasthan U.P. Himachal Pradesh Energy Charges 6.65 5.98 6.65 65 4.50 FSA/FCA 0.37 0.20 - - - ED 0.10 - 0.10 - - Municipal Tax 0.15 0.13 - - Steel Furnace 0.30 0.05 - - - Charges Total Rate (Rs/unit) 7.57 6.23 6.88 .65 2.3
(b) Minimum Demand Charges
Haryana Punjab Rajasthan U.P. Himachal Pradesh (Rs/unit) Minimum Demand 0.94 Adjusted 0.56 .45 0.48 Charges (on average 75% capacity utilisation) Based on the above, you would kindly infer that on an average 75% capacity utilisation in the year, the difference in Minimum Demand Charges work out to Rs 0.38, which translates into Rs 400-425 per MT higher Cost.
(c) Security Deposit Charges Haryana Punjab Rajasthan U.P. Himachal Pradesh Security Charges 1000 750 590 600 500 (Rs/KW) The increase from Rs 500 to 1000 per KW of Connected Load has burdened us further in terms of scarce capital being blocked. Given that we Steel Units (based
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That the difference in Power Tariff is between Rs 0.59-2.97 per Unit(Kwh), which on an average consumption in Steel Production of 1100-1200 units per MT, works out to minimally Rs 650 per MT. Freight Charges from Punjab/Rajasthan and U.P. are between Rs 350-400 per MT thus making supplies from nearby States competitive.
That We explored the possibility of the option of Purchase of power on open- access basis and to facilitate the same, we commenced establishing our own 11KV Independent Feeder Lines. However, this option was rendered un-economical as the Cross-Subsidy charged/ applicable was increased substantially.
That Steel unit which manufactured Steel Ingots from steel scrap are the continuous process industry whose profitability entirely depends on the cost of tariff and quality of supply. With the introduction of TOU Tariff, there is arguably some relief to the steel units, which are major power consumers close to 35% of the total conversion cost.
3. Amendment in TOU/TOD Tariff Plan 2017-18.
That the Tariff relief under TOU is from 10Pm to 5.30Am (next day). However, (utilizing only 50% of the installed capacity) we are operating our units from 10Pm to 8.00Am i.e one shift of 10 hrs. Working and, therefore request you to extend of TOU by 2.5 hrs. i.e from 10Pm to 8.00Am (next day), as we could utilized at least one complete shift. We also request the Hon'ble Commission to extend the facility throughout the year 2018-19.
It is, therefore most respectfully prayed that the petition of the applicant company may kindly be heard and considered.
(a) Reduction in Basic Tariff Charges
i.e. reduction in basic tariff for single point industry (i.e. units having own Independent Feeder)...
(b) Removal of Steel Surcharge
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This charge was being levied for Electric Arc Furnace/ Smelter Units which have a jerk-load plus a 50-60% higher Connected Load (than our Induction Furnace units) for the same production.
Being de-linked from non-jerk load/high connected load v/s load utilised steel plants and that the Steel Surcharge of Rs 0.30 levied on us should be removed as we (Steel Plants based on Induction Furnace):
. have no jerk-load (like Electric Arc Furnaces)
. have high power factor i.e. 0.90-0.95
. have maximum utilisation of Connected-Load i.e. we consume maximum units per MVA Connected Load and are optimum efficiency consumers
. have harmonics and load factors that are also optimal
(c) Reduction and Rationalisation of Minimum Demand Charges
Minimum Demand Charges be reduced from the present Rs 190 per KVA and charged on the basis of Connected Load utilised...
Reply of DISCOMs
I. Levy of service connection charges for EOL in respect of independent feeder.
It is submitted that issue regarding SCC raised by the objector does not pertain to the ARR filing and Tariff determination. However, Discom has already issued the relevant instructions on such matter and the SCC are recovered as per directions of HERC.
II. Disparity in Industrial Power Tariffs and Charges with adjoining States.
(a) Power tariff
It is submitted that industrial tariff in neighbouring states as quoted by objector have no relevance with the actual industrial tariff. The details of the tariff applicable tariff in neighbouring state is provided as under:-
Particulars Haryana Punjab Rajasthan U.P. Himachal Pradesh Energy Charges 7.17 6.46 7.30 7.39 5.11 FSA/FCA 0.37 0.20 - 0.34** - ED 0.10 - 0.40 0.39 0.56 Municipal Tax 0.16 1.22* 0.25 - 0.11 Fixed Cost 0.33 0.33 0.36 0.48 0.48
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6.26 Total Rate (Rs/unit) 8.12 8.21 8.31 8.60 Note: 1.22* Infra Tax in Punjab of 18%, while 0.34** in U.P is on account of Regulatory Surcharge.
From the above, it can be inferred that the cost of industrial tariff (including all the charges) in neighbouring states is higher than the industrial tariff in Discoms of Haryana. However, it submitted that as per Section 62 of Electricity Act, 2003 determination of tariff is sole prerogative of the State Electricity Regulatory Commission. Therefore, the Hon’ble Commission may take the appropriate view on the submission made by the objector.
(b) Minimum Demand Charges
The detail of Minimum demand charges in neighbouring states submitted by the objector doesn’t stand valid. Discom, considering the contract demand of 1000 KVA and Capacity Utilisation of 75% have assessed the per unit monthly minimum demand charges on the basis of recent tariff orders in neighbouring states and same are tabulated as under:-
Min. Min Consumption Demand Demand Billing Dema Per Month @ Rs/kVA States Charges Charges Deman nd 75% Utilisation h (Rs) d (kVA) Factor Punjab 205 Rs/kVA 80% 800 1,64,000 5,40,000 0.30 Haryana 170 Rs/kVA 100% 1000 1,70,000 5,40,000 0.31 Rajasthan 185 Rs/kVA 75% 750 1,48,000 5,40,000 0.27 UP 250 Rs/kVA 75% 750 2,00,000 5,40,000 0.37 Himanchal 250 Rs/kVA 75% 750 2,00,000 5,40,000 0.37 Assuming: Contract Demand of 1000 KVA Utilisation Factor of 75% of Contract Demand
From the above table, it is concluded that the per unit minimum demand charges in Haryana are at par with the neighbouring states. The objector’s submission is quite misleading and shall be discarded on the basis of its merit.
(c) Security Deposit Charges
It is submitted that as per the provisions of the Haryana Electricity Regulatory Commission (Duty to supply electricity on request, Power to recover expenditure incurred in providing supply and Power to require security) Regulations, 2016, a
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One of the major reasons for the implementation of the ACD was to protect the Licensee from consumers in case of default. However, Nigam is paying interest on the ACD in their respective bills. The instructions regarding interest on security deposit for FY 2018-19 is already circulated by the Nigam vide Sales Instructions No. 3/2018 dated 31st May 2018 which is @6.25% p.a.
In addition to the above, it is pertinent to mention here that the Hon’ble Commission has worked out the cross-subsidy surcharge based on the voltage wise calculation of Cost of Supply by apportioning the power purchase cost at different voltage levels considering the distribution losses at the relevant voltage level and the upstream system.
Nigam submits that the Cross-Subsidy Surcharge to be levied on consumer availing open access, determined by the Hon’ble Commission in its Tariff Order dated 11th July 2017, which is in line to the National Tariff Policy, 2016. The relevant extract of the aforesaid tariff order is reproduced as under:
“The Commission has considered the methodology prescribed by the National Tariff Policy dated 28.01.2016, while working out cross-subsidy surcharge in the present Order.”
It is submitted that the CSS worked out for the Nigam by the Hon’ble Commission is within (+/-) 20% limit in accordance with the National Tariff Policy.
III. Amendment in TOU/TOD Tariff Plan 2017-18.
It is submitted that the tariff rates for time slots of the day is fixed keeping in view the system load conditions and also as per Discom’s per unit power purchase cost over different time blocks of the day. The Hon’ble Commission has given the peak, off-peak and normal demand hours vide its Tariff Order for FY 2017-18 dated 11th July, 2017. The suggestion of objector to extend TOU from 10 PM-5.30 AM to 10 PM -8 AM is not appropriate as per HERC Order. However, the TOU/TOD Tariff Plan has been discontinued since March 2018.
(a) Reduction in Basic Tariff Charges
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Nigam submits that there is no provision for separate tariff for the single point industry (i.e. units having own Independent Feeder) in tariff schedule as applicable to different categories of consumers in State of Haryana.
However, determination of tariff is within the prerogative of Hon’ble Commission, therefore it is submitted that the objection is not reasonable.
(b) Removal of Steel Surcharge
Discom submits that tariff being charged to Arc Furnace category is according to the Retail Supply Tariff determined by the Hon’ble Commission. No surcharge is presently being charged to Arc Furnace category. The Tariff for are furnaces/steel Rolling mills is Rs. 6.95/kVAh, if supply is at 11 KV as per HERC Tariff Order dated 11th July 2017.
(c) Reduction and Rationalization of Minimum Demand charges
This objection is already dealt under response of objection No. 2(B). Therefore, the same may be considered by the Hon’ble Commission as a response of Discom for this query.
Commission’ View
The Commission has considered the objections raised and reply thereon filed by DISCOMs and will be considered while passing the Order.
2.3.7 Objections filed by M/s. Delhi Metro Rail Corporation
Objections filed by M/s. Delhi Metro Rail Corporation by way of Petition for review of Tariff Order dated 11.07.2017 passed by Hon’ble Commission in the case nos. HERC/PRO-39 of 2016 & HERC/PRO-40 of 2016 in the matter of ‘true- up for the FY 2015-16, Annual (mid-year) Performance Review for the FY 2016-17, Revised Aggregate Revenue Requirement of UHBVNL & DHBVNL & distribution & retail supply tariff for the FY 2017-18 (HERC/RA-4 of 2017).
The Captioned Review Petition has been filed by DMRC on 30.08.2017, submitting as under:-
1. That DMRC has taken electricity connection of 14 MVA from DHBVN for operation of Metro trains in Gurgaon & 7.78 MVA in Faridabad and DMRC’s yearly consumption had been approx. 47.34 Million Units and 22.33 Million Units
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respectively in the FY 2016-17. The total energy bill for FY 2016-17 was Rs. 35.93 Crore for HUDA City Center (HCC) and Rs. 17.19 Crore for Faridabad.
2. The increase in tariff is given as under:
Comparison of Previous and new tariff Tariff as per existing tariff Tariff as per new tariff Charges order of HERC for DMRC (FY order of HERC (FY 2017-18) 2015-16 & FY2016-17) for DMRC Rs. 5.90/kVAh Rs. 6.35/kVAh Unit tariff Rs. 160/kVA/month Rs. 160/kVA/month Contract Demand charges
It has been submitted that due to increase in unit charges, the annual financial repercussion for HCC is Rs 2,28,20,580.00 and for Faridabad is Rs 97,40,268.00 on DMRC. 3. That there are four issues to be addressed: a. Fixing of Tariff for DMRC in line with principal agreement between DMRC & GoH. b. Increase in tariff for DMRC in tariff order for FY 2017-18. c. The Actual/Maximum demand during feed extension to adjacent section (in case of disruption of power supply) to be ignored on the basis of reciprocity. d. Till the issues are decided the revision of tariff for FY 2017-18 should be kept on hold and the excess payment already made may be adjusted in the forthcoming electricity bills of DMRC. 4. Fixing of Tariff for DMRC in line with principal agreement between DMRC & GoH. 4.1 As per para 3.0 of the Agreement dated 17.11.2006 between DMRC & Govt. of Haryana for Gurgram stipulates the following: “………..Government of Haryana shall also arrange to provide electricity on cost price from Transco under open access system. Delhi Metro Corporation Limited shall pay wheeling charges as decided by Haryana state Electricity regulatory Authority as applicable from time to time.” 4.2 DMRC was made a special category due to its unique nature by the Commission in para 2.7 of the tariff order for FY 2010-11 under head "Tariff for sale of power to DMRC" inter-alia stipulated: “As per the proposed terms of Agreement DHBVNL has decided to provide electricity connection to DMRC on 66 KV. The Cost of supply (CoS) based on FY 2009-10 ARR has been worked out by DHBVNL as 397 Paisa/Unit. On the basis of CoS DHBVNL has proposed a separate tariff category for DMRC.”
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“…….As per DHBVNL's proposed term of Agreement, DMRC shall be provided connection at 66KV. DMRC shall construct 220KV sub-station and will directly draw power from HVPNL sub-station. It will construct 66 KV line from these sub stations to the main substation and from there the power will be distributed to the metro station and metro rail through separate lines. DHBVNL has proposed for recognition of DMRC as separate category of consumer and fixation of its tariff on the basis of actual cost of supply without affecting the subsidy or cross- subsidy elements.”
Further in the tariff order for FY 2011-12 & 2012-13, similar viewpoints had been taken by the commission while fixing tariff for DMRC. The Commission’s stand as separate category for DMRC was maintained till tariff order for FY 2014-15. 4.3 Further as per para 4.0 of agreement between DMRC and GoH for Faridabad following is mentioned “Government of Haryana shall provide electricity and water at no profit/no loss basis to DMRC”. Both the agreements for Gurgram & Faridabad are the guiding principle at which tariff for DMRC should have been fixed. 4.4 This is further to mention that, DMRC has invested huge amount for building its own power distribution network for the voltage levels below 66KV. This need to be seen in accordance with the Electricity Act 2003 Section 62(3), where it is stipulated that differentiation between consumers can be carried out according to consumers load factor, power factor, voltage, total consumption of electricity during any specified time at which supply is required or geographical position of any area, nature of supply and purpose for which supply required etc. 4.5 In this connection, discussion on various aspects are as under: 4.5.1 Voltage Level - that DMRC takes electricity at extra high voltage level i.e. 66kV. It does not contribute to the losses of DISCOMs below 66kV at all. All losses within DMRC’s network & borne by DMRC itself. 4.5.2 Load Factor - that DMRC’s load factor (24 hrs. basis) is moderately high and is 57% on 24 hours scale. DMRC being a MRTS, the services are restricted to 0600 hrs to 2400 hrs. & therefore no services are there in night hours.
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4.5.3 Regeneration of power - DMRC has contributed tremendously on the environment front by becoming the first ever railway project in the world to claim carbon credits for regenerative Braking. DMRC has also been certified by the United Nations (UN) as the first Metro Rail and Rail Based system in the world to get carbon Credits for reducing Green House gas Emissions as it has helped to reduce pollution levels in the city. 4.5.4 Power factor - that DMRC has adopted most energy efficient technologies in designing its system since conceptual stage & therefore it’s Power Factor is close to unity and best among all. 4.5.5 Geographical Area - DMRC’s network is passing through most congested areas of Delhi and ease out traffic problems of the capital city of India. 4.5.6 Purpose of Supply - DMRC is a public service & in transportation business of Delhi. Electricity is required for the Metro system; it is the most energy efficient mode of transport. If DMRC does not cater to requirement of Delhi then, public would use other means of transport which are not as energy efficient as Metro system and thus would result in degradation of environment. 4.5.7 Energy conservation policy of DMRC is in place and DMRC has consumed 596.7 MVAH in 2012-13 and 789.56 KVAH in 2016-17. Even though energy consumption has increased, through energy conservation measures, Per passenger energy consumption has reduced from 0.88 units per passenger in 2013-14 to 0.74 unit per passenger in 2016-17. The Petitioner submitted that in view of the above, DMRC tariff should be fixed after considering the huge investment done by DMRC in meeting the requirement of Electricity Act to be efficient consumer of Electricity.
4.6 This is also to mention here that owing to distinct nature of DMRC, its tariff was fixed at lower side as compared to Indian Railways till FY 2014-15. But w.e.f tariff order for FY 2015-16, DMRC’s tariff was raised and made equal to Indian Railways. It is once again submitted that MRTS is not comparable to Indian Railways in view of the following:-
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4.6.1 As DMRC operates in National Capital Region, its energy requirement is 0.78 kVAh/passenger journey which is much lower than the Indian Railways. 4.6.2 Since MRTS requirement is not there during the night, its working hours are restricted to 00:00 hrs., DMRC does not carry any freight and thus does not have any option to make up for the short fall in its revenue from passenger fare. The above view point has already been endorsed by Hon'ble commission in its tariff order for FY 2010-11, FY 2011-12 & FY 2012-13. 4.6.3 Metro system decongest the Roads of the National Capital Territory Region and provide environment friendly transportation system along with being energy efficient and pollution free system, thereby causing benefit to the Nation.
4.7 Since the inception, the rates of Railways versus DMRC are tabulated as under:
Comparison of tariff of Railways & DMRC
RAILWAYS DMRC Energy Charges Energy Charges F.Y. (Paisa / kWh or/ kVAh) (Paisa / kWh or/ kVAh) 2017-18 635/kVAh 635/kVAh 2016-17 590/kVAh 590/kVAh 2015-16 590/kVAh 590/kVAh 2014-15 560/kVAh 530/kVAh 2013-14 510/kVAh 480/kVAh 2012-13 510/kVAh 450/kVAh 2011-12 431/kVAh 395/kVAh 2010-11 431/kVAh 395/kVAh
From the above table it is evident that the DMRC tariff was always lower than the Railways tariff. It was for the first time in 2015-16 parity was drawn with Railways. DMRC has been penalized with the hike of unit rate tariff @ 60 paisa/unit which is maximum across the all the categories and same parity is being continued in fixing the tariff for FY 2017-18.
4.8 As per The Electricity Act 2003 part 7 Section 61, it is mentioned that
“The appropriate commission shall subject to the provision of this act, specify the terms and conditions for the determination of tariff and in doing so, shall be guided by the following, namely:-- (d) safe guarding of consumers interest and at the same time recovery of cost of Electricity in a reasonable manner; (e) The principles rewarding efficiency in performance;
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(g) that the tariff progressively reflects the cost of supply of electricity and also reduces and eliminates cross subsidy within the period to be specified by the appropriate commission.” 4.9 Since DMRC system is uniquely designed to fulfill the requirements of the Electricity Act, 2003, and hence it becomes entitled to be treated as a separate category for fixing of tariff. 5. Increase in tariff for DMRC in tariff order for FY 2017-18: Heavy increase in tariff for unit rate of electricity has been carried out by Hon’ble commission for FY 2017-18. In this regard the issues w.r.t tariff submitted by DMRC earlier is as under
5.1 The Commission in the tariff order for FY 2015-16 (at para 4.10, page 187) has stated as under:
“The Commission has noted the objection filed by the DMRC that their tariff ought to be equal to the bulk supply rate of the Discoms as per the Agreement signed with the State Government, and observes that the Agreement with Haryana Government referred to by the DMRC has not been approved by this Commission. Hence, in case the Haryana Government desires to introduce any concessional tariff for DMRC then they will have to compensate the Discoms for the loss of revenue vis-a- vis the tariff approved by the Commission. The Commission, keeping in mind the average CoS of the Discoms and the cross-subsidy limits prescribed by the NTP, has revised the tariff applicable to DMRC”.
Same tariff as of FY 2015-16 was maintained by Hon’ble commission in FY 2016-17 without assigning any reasons. 5.2 Even after maintaining unity power factor, high load factor, absorption of all the losses & maintenance costs in DMRC's network/system and Provision existing in the Agreement with Govt. of Haryana for supplying electricity to DMRC at cost price to Transco, the tariff for DMRC is being fixed much higher as evident from the following table: Power Purchase cost Vs. Actual cost to DMRC Cost of Electricity to DMRC Power purchase cost at Unit rate Rs./kVAh for Haryana boundary in Avg. unit price of DMRC SN. F.Y. DMRC at 66kV Rs./kVAh including Fixed charges & (as per Tariff Order of FSA HERC) 1 2010-11 2.60 3.95 4.74 2 2011-12 2.85 3.95 4.69
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Cost of Electricity to DMRC Power purchase cost at Unit rate Rs./kVAh for Haryana boundary in Avg. unit price of DMRC SN. F.Y. DMRC at 66kV Rs./kVAh including Fixed charges & (as per Tariff Order of FSA HERC) 3 2012-13 3.44 4.50 5.70 4 2013-14 3.52 4.80 6.50 5 2014-15 3.84 5.30 6.95 2015-16 6 & 3.95 5.90 7.61 2016-17 4.13 6.35 7 2017-18 (#1) 7.63 (#2) Note: #1 indicates that this rate of power purchase at Haryana boundary which, in the case of DHBVN has been arrived by considering net energy of 26364.73 MUs available to DHBVN for use in Haryana, but while deriving the rate of power purchase at Haryana boundary for DHBVN, net revenue of Rs 11021.05 Crores apportioned on account of sale/banking of 21102.68 MUs. The above calculations clearly convey that in the calculation of rate of power purchase, all the losses of 5262.05 MUs (intra-state transmission of 648.57 MUs as well as distribution losses of 4613.48 MUs) have been indirectly accounted for while determining the above mentioned rate of power purchase of approximately Rs 4.13 per unit at Haryana boundary. From the above, it is clear that the rate of power purchase has taken into consideration all kinds of transmission and distribution losses, whereas, as per Agreement between DMRC and Govt. of Haryana, the above rate of power purchase should be declared by DHBVN separately for each of the voltage levels (66kV in the case of DMRC) by clearly accounting for the losses at each of the voltage levels (220, 132, 66, 33, 11KV & LT level).
#2 (Ref: Page 236 & 237 of tariff order for FY 2017-18). The increase in tariff in case of DMRC is against the spirit of Agreement signed between DMRC & Govt. of Haryana.
5.3 The losses disclosed by DISCOMs in table at page 250 & 251 of tariff order for FY 2017-18 reveals that DISCOM (i.e. DHBVNL) has disclosed losses upto 33 kV only. The losses at 66kV and above have not been disclosed. The above mentioned table is reproduced below: Losses disclosed by DISCOMs at 33 KV and below.
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Voltage Levels UHBNL DHBNVL 33 kV line losses 0.40% 0.45% 33 kV Transformation losses 0.23% 0.20% 11 kV line losses 6.95% 8.40% 11 kV Transformation losses 0.96% 0.93% LT line losses 5.62% 4.70% Total losses up to LT level 13.57% 14.68% Losses up to 11kV level
Regarding losses the commission has recorded the below mentioned: “---it is possible to work out the total losses up to 11 kV level & overall losses at LT level. However working out losses at different HT level i.e. 66 KV, 132 KV, 220 KV etc is not possible till the time similar data is made available at these voltages by the utilities. Hence for calculating voltage wise losses the commission has broadly considered only two categories i.e. HT (11kV level and above) and LT voltage level”.
In DMRC’s view point, since DMRC is getting separated at 66kV level, therefore losses at 66kV level to be disclosed/ accounted for by the DISCOMs to determine the actual cost of supply to DISCOM at 66kV, which is desirable in line with clause 3.0 of Agreement dated: 17.11.2006 between DMRC & Govt. of Haryana for Gurugram and clause 4.0 of Agreement dated: 26.03.2012 between DMRC & Govt. of Haryana for Faridabad. Further, from the Table-4 of technical losses it is evident that the losses at 33kV level are (0.45%+0.20%) i.e. 0.65% only, and therefore losses at 66kV would be even lower and then the cost of supply to DISCOMs at 66kV level would be approximately Rs. 4.13/kVAh plus losses upto 66kV level. In light of facts mentioned above, DMRC’s tariff needs to be reviewed and also that re-fixing of tariff may be carried out considering the distribution losses at 66KV where DMRC is separated from the network of DISCOMs. Till the issues are decided the revision of tariff for FY 2017-18 should be kept on hold and the excess payment already made may be adjusted in the forthcoming electricity bills of DMRC.
6. The Actual/Maximum demand during feed extension to adjacent section (in case of disruption of power supply) to be ignored on the basis of reciprocity: 6.1 DMRC is an essential service & preferred mode of transport for commuting passengers between Delhi & NCR reliving roads from congestion & reducing pollution in the busy areas of Delhi & NCR. Peak hours rush is efficiently handled by Metro services making the passengers adapted to this service.
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The services cannot be interrupted even during power supply failure of any of the feasible power source available in DMRC’s network. 6.2 There have been cases of power supply failure from DHBVNL side to HCC / RSS of DMRC. Number of power supply failures during last 03 years are shown as below:-
Total Interruptions in hrs. DISCOM 2017-18 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 (upto may) TPDDL 5 10 28 14 15 3 49.20 BRPL 77 17 68 134 67 18 1.75 BYPL 2 9 76 40 40 14 0.5 NDMC 0 4 2 1 9 12 0 DHBVN - 3 16 8 31 142 49.50 PVVNL 49 63 54 4 23 10 0.50 Total 133 106 244 200 186 199 101.45
Total no. of Interruptions DISCOM 2017-18 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 (upto may) TPDDL 21 12 16 15 27 14 4 BRPL 42 21 31 59 63 61 9 BYPL 5 11 30 28 35 24 1 NDMC 0 13 4 2 7 21 0 DHBVN - 8 37 19 43 62 63 PVVNL 28 18 30 11 9 9 3 Total 96 83 148 134 184 191 80
6.3 During failure of power from Gurgaon (fed from DHBVNL), electrical power to run metro trains is fed from Delhi DISCOMs in order to maintain train services in Haryana.
During power failure in the area of Delhi DISCOMs when power is extended from HCC/RSS to Delhi, penalty at double the fixed charge rates as Load Violation Charges (LVC) is chargeable by DHBVNL.
If during power supply failure in Gurgaon, DMRC does not extend power supply from Delhi DISCOMs & stops train services in the area of Gurgaon till power supply is restore, there will be inconvenience to passengers to and from Gurgaon & people will go for alternative mode of transport which is less energy efficient & hence will lead to environmental degradation.
Therefore Actual/Maximum Demand during this period of power extension needs to be ignored for the purpose of billing. 7. Prayers: In view of facts brought out in Para1.0 to 4.0 above, DMRC would once again request the Hon'ble commission for the following: 7.1 Fixing of DMRC’s tariff fixed as principle agreement between DMRC & GoH:
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In light of para 3.0 of the Agreement dated 17.11.2006 signed between DMRC & Govt. of Haryana for Gurugram and Para 2 of the Agreement dated 26.03.2012 signed between DMRC & Govt. of Haryana for Faridabad, DMRC has invested huge amount and there is no change in condition, consumption, Power Factor, Load factor, voltage levels or any other factor in case of DMRC, therefore earlier stand of the commission may be maintained and accordingly tariff for DMRC may be reviewed by keeping DMRC as separate category for the purpose of tariff fixation. 7.2 Review of tariff fixed for DMRC in tariff order for FY 2017-18:
In view of various facts given in the previous paras, the tariff for DMRC may be fixed on cost price from Transco, and the Commission is requested to give directive/instruction to DISCOMs to declare the losses at each voltage level (i.e. 220 kV, 132 kV, 66 kV, 33 kV, 11 kV & LT level) separately & declare the cost of supply at each of voltage level, so that cost of supply at 132 kV & 66 kV to Transco/DISCOMs is well known to decide the tariff & corresponding compensation to be given to DMRC by Govt. of Haryana. 7.3 Allowing Extension of power from HCC/RSS to Delhi area ignoring Actual/Maximum demand:
For the reasons explained in the foregoing paras, during power extension to Delhi Area from HCC/RSS during power failure in Delhi DISCOMs, the actual/maximum demand may not be made applicable for DMRC and such actual / maximum demand during this period of power extension need to be ignored.
Reply filed by DHBVNL:
Reply was submitted by DHBVNL, vide letter no. Ch-14/SE/RA-600 dated 02.01.2018, in response to the Commission’s letter no. 2098-99/HERC/Tariff dated 13.09.2017 on the captioned Review Petition filed by DMRC on 30.08.2017, submitting as under:- 1. Fixation of electricity tariff on cost basis as per the terms and conditions of Agreement between DMRC & GoH, for extension of services of DMRC to Gurgaon and Faridabad.
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DHBVNL has been levying the energy charges as per the tariff determined by HERC from time to time. However, citing the above agreement, DMRC has been requesting since long for fixation of tariff on the bulk supply rate approved by HERC. This implies that DMRC wants to get the tariff fixed equivalent to the average power purchase cost at DISCOM’s periphery after accounting inter-state sales and HT losses. The request of DMRC is justified neither for direct subsidy nor for cross subsidy as the tariff is determined by HERC in accordance with power vested with it under section 62 of the Electricity Act, 2003. Thus, the Nigam is bound to levy the tariff as approved by the Commission. 2. Increase in tariff for DMRC in tariff order for FY 2017-18. The request of DMRC is not feasible as the tariff is only determined by the Commission after accounting all the factors as per provisions of Section 62 of Electricity Act 2003, hence denied. 3. Exemption from levy of load violation charges @ Rs.125/- per KVA in case of extension of power supply from DMRC RSS (Receiving Substation) situated in Haryana to feed the adjacent RSS situated in Delhi on account of failure of power supply. As per schedule of tariff issued by the Commission, the demand surcharge is being levied to DMRC as per following methodology:-
Demand Surcharge
In case the consumer exceeds his contract demand in any month, the excess demand shall be charged @ Rs. 125 per KVA or part thereof per month. In case consumer exceeds his contract demand in any month due to shifting of load by the consumer in case of failure of supply at any other point under the jurisdiction of Licensee and for reasons attributable to the Licensee, the excess demand shall be determined on the basis of contract demand for supply at such points taken together. When DMRC overdraws related to its sanctioned load, it puts an additional and undesirable strain on our system. This has to be penalized irrespective of who does it.
Accordingly, the load violation charges are being levied as per schedule of tariff approved by the Commission to restrict DMRC to draw power within that of sanctioned contract demand.
DHBVNL further submitted that the reply to the aforesaid issues on one of the similar representation of DMRC made with the Nigam in the past, has already been given vide letter bearing Memo No. ch. 105/SE/C- 383/16 dated
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19.09.2017 after holding meetings and discussing the matter with them. Further, such issues have also been raised by DMRC during public hearing held in the past on the ARR petition filed by the Nigam before HERC and the same was not considered by the Commission.
In view of the foregoing submissions, DHBVNL has prayed that the issues raised by DMRC may be disallowed as already been done in the past by the Commission.
Commission’ View
It is observed that the Commission has already deliberated the issues in detail in its Order dated 29.05.2014 in case no. HERC/PRO-41 of 2013, HERC/PRO-42 of 2013 & HERC/PRO-43 of 2013. Additionally, It is evident from the grounds of appeal and the language used thereto, that the review petition rather than justifying the review sought on the basis of any new / important matter of evidence or any other sufficient reasons is more in the nature of assertion that certain facts and figures were not considered or not taken up by the Commission in the right perspective. Consequently, in the considered view of the Commission such plea i.e. issues on which the Commission has already deliberated and passed Order and the same being re-submitted for favour of consideration cannot also fall under the purview of section 78(2)(c) of HERC (Conduct of Business) Regulations, 2004.
In view of the above, the Review Petition no. HERC/RA-4 of 2017 filed by M/s. Delhi Metro Rail Corporation is disposed of as dismissed.
Before proceeding further, the Commission would like to make it clear that the Commission, unless specifically mentioned, does not necessarily subscribe to the replies filed by the Discoms to the objections raised by the interveners herein.
2.4 State Advisory Committee (SAC)
The 17th meeting of the State Advisory Committee was held on 30.10.2018 at 2:30 P.M in the Conference Hall of HERC at Panchkula to seek views of the Members on the issues mentioned in the agenda. The agenda was sent to the SAC Members in advance. The list of participants is enclosed as Annexure.
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At the outset, Hon’ble Chairman, HERC, Sh. Jagjeet Singh accorded a warm welcome to all the Members of SAC and stated that the Commission notes with immense satisfaction that with sustained and focused efforts and able leadership of the CMD / MD and the agile team the power utilities have made financial turnaround and are expected to further improve the operating efficiency as well as quality of service to the electricity consumers in Haryana.
1. The Hon’ble Chairman stated that the agenda for the present SAC Meeting has been circulated well in advance. Each agenda item shall be taken up accordingly for eliciting suggestions / comments of the SAC Members. 2. Accordingly, the first agenda i.e. confirmation of the minutes of the meeting of 16th SAC meeting held on 20th March, 2017 was taken up for deliberation. The Hon’ble Chairman informed that the said MoM was circulated to the SAC Members and no comments were received on the same. Hence, the MoM of the 16th SAC meeting stands confirmed. 3. The next agenda listed for the present meeting i.e. ARR / Tariff petitions of UHBVN, DHBVN, HVPNL and HPGCL were taken up for deliberations. The Chairman and Managing Director of the Distribution Licensee i.e. UHBVN and DHBVN Shri Shatrujeet Kapur opened the discussions on the ARR / Tariff proposal of the Discoms. He stated that public hearing on ARR / Tariff of UHBVN and DHBVN were held on 11.9.2018 and all the aspects were deliberated in detail and objections / suggestions of various stakeholders were taken on record and accordingly replied to by the Discoms and the same was made available to the Commission. He dwelt at length on the distribution / AT&C losses of the Discoms. It was informed that in the licensed area of the DHBVN the loss target of 15% shall be achieved. However, in the distribution circles of UHBVN there could be some slippage as it is difficult to reduce losses by over 10%. However, he assured that the target of 15% shall be achieved in about two years time as efforts are being made on a sustained basis to bring down technical as well as commercial losses including improvements in revenue collection efficiency. In the interim, Shri Kapur suggested that the Commission may consider pegging the loss trajectory at about 20.5% for the FY 2018-19 which is achievable and will also boost the confidence level of the Nigam that they would feel that they are working
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towards an achievable target and not a target which, upfront, appears un- achievable. The CMD, Shri Kapur, pointed out the fact that the working capital allowed to the Discoms on normative basis is far below the actual levels. This becomes impediment in efficient day to day operation of the Discoms. Hence, to achieve greater operating efficiency he suggested that while allowing working capital and interest thereto the Commission may keep the actual working capital existing / required of the Discoms in mind and the norms should relate to the actual figures.
4. While commenting on the representations of Shri Sampat Singh, Ex-Minister and Shri R.K. Jain, Advisor forwarded to the Discoms for reply / comments. Shri Kapur informed the SAC Members that the same has been received yesterday and they will file a reply to the same. The petition for approval of revised tariff based on subsidy approved by the State Govt. is already before the Commission. He informed that the determination of tariff falls in the exclusive domain of the HERC and no change could be done in it by the Discoms on their own. However, as per the statute, the State Govt. can subsidise any consumer or class of consumers; accordingly the announcement / sales circular has been issued. The difference between the tariff determined by the HERC and those announced by the State Govtt. / Discom shall be paid by the Government as quantified by the HERC. He further informed that any backlog of subsidy as approved by the HERC shall be taken up with the Govt. for reconciliation. On the issue of Sales Circular Shri Kapur informed that the same has no financial impact as it is revenue neutral in view of the fact that the shortfall in revenue shall be bridged by way of subsidy from the State Govt. under the present dispensation and any other such scheme that may be announced by the State Govt. On the issue of Industrial (HT/LT) /Commercial and pending AP connections under Tatkal Scheme raised by the Hon’ble Chairman, it was informed by the CMD that the Tatkal Scheme has been discontinued and under the old dispensation less than 300 connections are pending which could not be taken up due to standing crop and now this backlog shall also be addressed. He further informed that almost all directives issued by the HERC have been attended to and the work of installing smart meters is in progress in the designated areas.
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To begin with 1 Million Smart meters are to be installed in Haryana. The Scheme was initiated from Panipat. The old meters are being sent firstly to the laboratory to satisfy that the said meter have not been tempered with. Once the Laboratory clears them, the same shall be utilised in other places. 5. Upon this, Hon’ble Chairman advised the CMD Sh. Kapur to release the pending connection of all type of consumers in a time bound manner. Hon’ble Chairman emphasised the need to promote renewable energy and also the efforts required to achieve RPO target. Hon’ble Chairman suggested that HT/LT, Single Point Connection of Group Housing Society & other establishments may be given certain relaxations to promote the renewable energy, in case they install smart meter as per CEA norms along with smart grid and Rooftop Solar Power System. The Commission may also consider granting certain relaxations to consumers intending to get the power supply on higher voltage & get their load enhanced along with Rooftop Solar Power & install Smart Meter as per CEA norms along with Smart Grid. The Commission may also consider relaxing any provision in the existing Regulations. He solicited comments/suggestions on the same. In order to ensure proper utilization of the assets (meter), Chairman suggested that the electronic meters being replaced by the smart meter in urban areas be installed in rural areas, by the same person who is replacing the smart meter, after getting the same checked from the laboratories. In response, the CMD submitted that the electronic meter so replaced with smart meters may have problems like burnt, tampered, sticky inaccuracy etc as such the same will be installed in rural area after getting the same checked/ rectified from the laboratory.
On the issue of strengthening of CGRFs, the CMD submitted that in compliance to the Commission directives they have deployed sufficient resources to both the CGRF. As far as shifting of CGRF Kurukshetra to Panchkula is concerned, the CMD apprised the Chair that significant amount for construction of office building and creation of other infrastructure at Kurukshetra have been spent, as such it may not be possible to shift CGRF Kurukshetra to Panchkula. Besides this, Kurukshetra is a central place and suits the public at large. Chairman pointed out that representation from both the CGRF for filling up of vacant posts are being regularly received in the
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Commission and directed CMD to take appropriate action in this regard. The Chairman further directed CMD to submit a concrete action plan on all the directives issued in the past.
Shri S.K. Nayyar, President, Resident Welfare Association, Panchkula pointed out that there is a fear in the minds of the people that if somehow the Govt. changes, the orders of Hon’ble CM would not be implemented and the public would be burdened by the utilities for bills of previous period also, as no approval of HERC has so far been obtained on the announcement of Hon’ble CM which would be provided in the shape of subsidy. The CMD assured that Govt. is well aware and that there are approvals of the Government on file. There should be no fear and petition stands filed in the HERC and hopefully that will be approved. Shri Nayyar also stressed that smart meters should also be installed in Panchkula immediately on the pattern of Gurgaon and Faridabad. He also pointed out that if a smart meter is installed outside the society and there is difference in the reading of outer and inner meters then reasonable concession should also be given to the consumers. He further pointed out that slab benefits should also be provided to the consumers who consumes more than 800 Units and stressed that slab benefits should be available to all domestic consumers. He also pointed out that spot billing process should be implemented in Panchkula also and CMD assured that this will be completed within two years and everything will be streamlined during this period.
Shri Wazir Singh from Hisar pointed out that several new AP connections are pending in rural areas. After clearing the agricultural tatkal schemes connections, the rural connections should also be cleared. He also mentioned that single point system should be streamlined in the Societies which will be beneficial to the consumers as well as the Utilities. On the issue the CMD informed that release of AP connections involves State Govt. subsidy and hence the Govt. has to take a call on annual targets for the same. However, the backlog of tatkal connections, pending due to standing crop, shall be cleared soon.
Shri Anurag Aggarwal, MD, HVPN pointed out that they have prepared the comments on ARR and the same will be sent to HERC shortly. He further informed that in Gurgaon and Faridabad they have set up GIS Sub Stations
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as technical upgradation is extremely important and they are doing work on the same. He informed that they are the first State in the Country to install such substation. He further requested that HERC should consider their ARR proposal in an appropriate manner for the smooth functioning of the Utility. Hon’ble Chairman suggested that HVPNL should also promote smart meters & smart grid in their organisation.
Representative of HPGCL pointed out that in Yamunanagar and Panipat they have coal upto 5 days whereas in Hisar the coal supply is on full swing and the Railway sends the coal as per the requirements of the power plant by seeing their consumption on day to day basis. In Faridabad the minimum staff of 22 employees is there. Hon’ble Chairman, HERC pointed out that the staff, of power plants proposed to be phased out, should be utilized by exploring the possibilities of Small Hydro Projects, Solar projects and Biogas etc. For this purpose, HPGCL should contact Irrigation department, PGIMS Rohtak, Universities, Gaushalas and other big institutions for installing the projects such as Hydro, Solar, Bio-gas, Bio-mass etc. Bricks made from the utilisation of Fly Ash should be promoted so that the environmental problem arising out of Fly Ash is solved and there is a good source of income also.
The meeting ended with a vote of thanks to the Chair.
2.5 Supplementary submissions of DISCOMs
UHBVNL, vide memo no. Ch-05/SE/RA/N/F-25/Vol (72) dated 20.09.2018 filed supplementary submissions on behalf of both the DISCOMs, submitting as under:-
1. That the Petitioners had filed Petition No. PRO-85 & 83 of 2017 for True-up of FY 2016-17, Annual Performance Review (APR) for FY 2017-18, approval of (ARR) for FY 2018-19 of UHBVN and DHBVN. The public hearing on the matter was held by the Commission on 11.09.2018. 2. That in the said Petitions, both the Petitioners i.e. UHBVNL and DHBVNL had prayed for continuation of current level of tariff with the revenue gap proposed to be funded through operational financing as proposed under UDAY scheme. 3. That subsequent to the hearing held on 11.09.2018, the State Government has decided to grant relief to the domestic consumers by way of subsidy as follows:-
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Proposed DS Tariff Existing DS Tariff (After Govt. Subsidy) Slab (Units per Slab(Units per Rs per kWh Rs per kWh month) month) Category I Category I 0-50 2.70 0-50* 2.00 51-100 4.50 Category II Category II 0-150 4.50 0-200 2.50 151-250 5.25 201-250 5.25 251-500 6.30 251-500** 6.30 501-800 7.10 501-800 7.10 Category III Category III Above 800 7.10 Above 800 7.10
*Only consumers having a monthly consumption of 50 units or less will get the benefit of subsidised tariff of Rs 2 per unit. In other words, if the monthly consumption exceed 50 units then the tariff for Category II will be applicable for first 50 units also.
**Only the consumers having a monthly consumption of 500 units or less will get the benefit of proposed subsidized tariff. If the monthly consumption exceeds 500 units, the existing tariff will be applicable.
4. That the aforesaid subsidy in domestic tariff will be applicable w.e.f. 01.10.2018 on pro rata basis, subject to the following conditions: - i) The consumer should not have any defaulting amount pending against his/her account as on 30.06.2018. If any defaulting consumer clears his/her dues after 01.10.2018, the benefit of subsidy will become applicable only with effect from the date the amount is cleared; ii) Electro-mechanical meter in the case of rural consumer, if any, would be replaced with electronic meter after relocation outside residential premises. No meter cost will be charged from the consumer. 5. Consumers who opt for settlement of pending electricity dues as per Sales Circular No. U-15/2018 dated 20.09.2018 shall also be eligible for subsidized tariff on depositing the principal amount or, as the case may be, the first installment of the principal amount, subject to fulfilment of other conditions as mentioned above. 6. That the annual subsidy burden for allowing the subsidized tariff as above has been worked out at Rs 677 Crores which would be compensated by the State Govt.
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UHBVNL has submitted the above for taking the same on record for making necessary provision in the ARR/Tariff Order as and when the same is issued as also for giving the appropriate directions to the State Government for payment of subsidy in advance in accordance with the provision of the Section 65 of the Electricity Act 2003 or for any other appropriate order/directions as the Commission may deem fit.
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Chapter 3
ANALYSIS OF ARR FILINGS AND COMMISSION’S ORDER
The Commission, while passing this Order for True-up of the FY 2016-17 Annual (Mid-year) Performance Review of the FY 2017-18 and determination of ARRs of the UHBVNL and DHBVNL for the FY 2018-19, has taken into account their respective Petitions, additional information/data provided by them from time to time, revised ARRs, objections / suggestions of the stakeholders, replies of distribution licensees thereto, views expressed by the objectors during the public hearing(s) and the suggestions of the State Advisory Committee.
3.1 True-up of the ARR for the FY 2016-17
The Discoms have submitted that their petition(s) for True-up of the ARR for the FY 2016-17 are based on the audited accounts. The True-up petitions have been examined by the Commission in the light of the MYT Regulations, 2012 and amendment thereof, relevant Orders of the Commission and the audited accounts for the FY 2016-17 made available to the Commission by the Discoms.
Regarding True-up of the ARR, the MYT Regulations, 2012 provide as under:-
“13. TRUING-UP 13.1 Truing-up of the ARR of the previous year shall be carried out along with mid-year performance review of each year of the control period only when the audited accounts in respect of the year(s) under consideration is submitted along with the application. In case audited accounts pertaining to the year, of which truing-up is to be undertaken, are not available, the generating company or the licensee as the case may be, shall submit the provisional account duly approved by the Board of Directors of the company/licensee. 13.2 Truing-up of uncontrollable items shall be carried out at the end of each year of the control period through tariff resetting for the ensuing year and for controllable items shall be done only on account of force majeure conditions and for variations attributable to uncontrollable factors. 13.3 The Commission shall allow carrying costs for the trued–up amount (positive or negative) at the interest rates specified in these regulations by adjusting the interest allowed on the
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working capital requirement for the relevant year of the control period. Provided that no carrying cost shall be allowed on account of delay in filing for True-up due to unavailability of the audited accounts; Provided further that if the Commission determines an over recovery during the true- up, funding cost for such trued up amount shall be considered for the delayed period and adjusted accordingly as per provisions of this regulation. 13.4 Over or under recoveries of trued-up amount in previous year(s) of the control period shall be allowed to be adjusted in the ensuing year of the control period by appropriate resetting of tariff. The unrecovered amount in the one control period shall be adjusted in the subsequent control period”.
Accordingly, the True-up of each item of expenses is discussed in the paragraphs that follow.
3.1.1 O&M Expenses
The O&M expenses comprise of Employee cost, Terminal benefits, R&M expenses and A&G expenses. The MYT Regulations clearly provide for the methodology and principles to be considered for calculating the True-up amount. However, as the Jind Circle was transferred vide the State Government Notification dated 3.07.2013 from the licensed area of UHBVNL to DHBVNL in July 2013, the impact of the same has been taken into account by the Commission. Resultantly, the approved expenses for both UHBVNL and DHBVNL have been adjusted to enable an appropriate comparison of actual expenditure with the approved expenditure for True-up exercise for the FY 2016-17.
In line with regulation 57.3 of the HERC MYT Regulations 2012, the Inflation factor for the FY 2016-17, is calculated as under:-
INDXn = 0.55 * Consumer Price Index (CPI) + 0.45 * Wholesale Price Index (WPI).
Table: Calculation of Weighted Annual Average Inflation for FY 2016-17 over FY 2015-16
Index = (0.55 * CPI +0.45 * WPI) Index (n) for FY 2016-17 201.9817 Index (n-1) for FY 2014-15 195.1225 Weighted Average Inflation Factor (rounded off) 3.52%
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UHBVNL
The Commission had allowed O&M expenses (excluding terminal benefits) amounting to Rs. 612.12 Crore for the FY 2015-16 as part of True-up in the ARR/Tariff Order for the FY 2017-18. Hence, the same shall now form the base year figures for calculating the admissible Employee and A & G Expenses for the FY 2016-17. The O & M expenses are calculated as per the MYT Regulations i.e. employee and A & G Cost are calculated after accounting for the increase (based on the inflation factor) and R & M cost is calculated based on 1.65% of average GFA of the FY 2016-17. Accordingly, normative O & M expenses, as per the MYT Regulations, works out to Rs.706.15 Crore. However, the actual expenditure incurred by UHBVNL is Rs. 806.22 Crore as per the audited accounts for the FY 2016-17 as against Rs.736.48 Crore approved by the Commission in the MYT Order for the FY 2016-17. The actual expenditure, therefore, is higher than the allowable O & M expenses as per the MYT Regulations and the increase is due to the higher employee cost and A&G expenses. The licensee was directed to provide details regarding new recruitments during FY 2016-17 so that the reasons behind additional cost incurred could be arrived at. The details provided by the licensee show that it has not recruited any employees during the FY 2016-17 except as a consequence of court cases and therefore the actual expenditure incurred by the licensee on the employee cost is allowed as true up for the FY 2016-17. The increase in A&G expenses is mainly on account of higher expenditure on telephone, postage & telegram charges, service charges, printing & stationery etc. The licensee has not provided any explanation for seeking true up of A&G expenses beyond the normative increase to be allowed as per the MYT regulations. The Commission is therefore, constrained to restrict the true up of A&G expenses to normative amounting to Rs. 77.89 crores. Therefore, Rs. 787.70 Crore is now approved as the revised O&M expense for the FY 2016-17.
Table: O&M expenses of UHBVNL for FY 2016-17 (Rs. in Crore) UHBVNL (actual HERC as per Audited (revised Particulars True-up HERC Approval Accounts) approval) FY 2015-16 2016-17 2016-17 2016-17 Employees Expenses (excluding terminal benefits) 498.49 538.35 647.39 647.39 A & G Expenses 75.24 80.43 96.41 77.89
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UHBVNL (actual HERC as per Audited (revised Particulars True-up HERC Approval Accounts) approval) FY 2015-16 2016-17 2016-17 2016-17 R & M Expenses 38.39 117.70 62.42 62.42 Total 612.12 736.48 806.22 787.70 DHBVNL
The O&M expenses (excluding terminal benefits) of DHBVNL for the FY 2015- 16 approved by the Commission was Rs. 745.45 Crore. Hence, this shall be the base year figures for the purpose of calculating the normative Employee and A & G Expenses for the FY 2016-17. The O & M expenses are calculated as per MYT Regulations i.e. employee and A & G Cost are calculated after accounting for the increase (based on the inflation factor) and R & M cost is calculated based on 1.65% of average GFA of the FY 2016-17. Total allowable O & M Expenses, as per the MYT Regulations, work out to Rs. 851.62 Crore as against Rs. 835.40 Crore approved in the MYT Order for the FY 2016-17 and Rs. 819.75 Crore actual expenditure incurred by DHBVNL as per audited accounts. The Commission observes that though the increase in employee cost is 4.96% over the previous year, the same is considered reasonable in view of the increase in DA for the year. The increase in A&G expenses is mainly on account of higher expenditure on consultancy charges, service charges, service tax on reverse charge, other material related expenses etc. The licensee has not provided any explanation for seeking true up of A&G expenses beyond the normative increase to be allowed as per the MYT regulations. The Commission is therefore, constrained to restrict the true up of A&G expenses to normative amounting to Rs. 74.67 crores. Therefore, Rs. 812.24 Crore is now approved as the revised O&M expense for the FY 2016-17.
Table: O & M Expenses of DHBVNL for FY 2016-17 (Rs. in Crore) Particulars Audited HERC Approval DHBVNL (as per HERC (revised expenses Audited approval) Accounts) 2015-16 2016-17 2016-17 2016-17 Employees Expenses 637.68 629.03 669.34 669.34 A & G Expenses 72.13 73.60 82.18 74.67 R & M Expenses 35.64 132.77 68.23 68.23 Total 745.45 835.40 819.75 812.24
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In this regard, keeping in view of the rapid technological changes and the implementation of various technologies / schemes such as RAPDRP, smart metering and smart grid technologies, DISCOMs are directed to undertake manpower planning & rationalizations to rein in employees cost. In order to upgrade skills of the employees to meet these technological changes, a Training Programme /calendar be prepared and uploaded on their website at the beginning of the Financial Year.
The DISCOMs are directed to keep themselves updated regarding the latest technology and commensurate training to the staff. As part of the capex plan of the DISCOMs, the Commission approves Rs. 5 crore for latest tools & equipments for technical upgradation of its systems.
Further, in view of heavy expenditure on the establishment the four power utilities incurred and also the shortage of technical staff to maintain the system and over staffed clerical and non-technical posts, establishment needs re-structuring. The Commission in its earlier Orders had directed the discoms to examine the issue and take action for re-structuring. The status in this regard be updated and the matter may also be taken up with the State Government.
The Commission has also observed that DISCOMs are incurring huge expenditure on consultancy. In this regard, it is directed that consultants should be hired only against the vacant post and not where the regular post is existing.
DISCOMs are directed to optimize inventory for spares and other maintenance equipments etc. and restrict itself in piling up of inventory. Every efforts should be made by DISCOMs to keep the minimum /optimum stock of maintenance spares. Further, the inventory be also hosted on the website of DISCOMs, so that users can easily access the same and if need arises, utilise the same.
3.1.2 Terminal benefits
Terminal benefits are uncontrollable expenses as per the MYT Regulations, 2012. Hence, the same are trued-up based on the audited accounts of the Discoms i.e. Rs. 421.06 Crore for UHBVNL and Rs. 420.00 Crore for DHBVNL.
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3.1.3 Depreciation
The Commission observes that actual opening Gross Fixed Assets (GFA) as on 1.4.2016 for UHBVNL is Rs. 6374.65 Crore i.e. lower than Rs. 6778.52 Crore estimated by the Commission for calculating depreciation for the FY 2016-17. While in the case of DHBVNL the actual opening GFA as on 1.4.2016 as per audited accounts for the FY 2016-17 is Rs. 6610.84 Crore i.e. lower than Rs. 7317.14 Crore estimated by the Commission for working out depreciation for the FY 2016-17 in the MYT Order dated 01.08.2016.
In view of the change in the opening balance of GFA and the composition of assets, the average rate of depreciation for FY 2016-17 works out to 4.65% as against 4.64% considered by the Commission for UHBVNL and 4.54% against 4.44% for DHBVNL in the MYT Order dated 01.08.2016.
The Gross depreciation for the FY 2016-17, as per the audited accounts, is Rs. 296.23 Crore and Rs. 300.42 Crore for UHBVNL and DHBVNL respectively. The net depreciation (net of depreciation on assets funded through consumers’ contributions/grants) is Rs. 262.04 Crore and Rs. 215.48 Crore respectively for UHBVNL and DHBVNL. Accordingly, the Commission approves the deprecation as per the audited accounts as above, the details are provided in the Table below:-
Table: Depreciation of UHBVNL for FY 2016-17 (Rs. Crore). Approved in the MYT Actual as per HERC Revised Tariff Order dated Audited approval for the FY Particulars 01.08.2016 accounts 2016-17 Opening Gross GFA for the year 6778.52 6374.65 6374.65 Depreciation 314.68 296.23 296.23 Rate of Depreciation 4.64% 4.65 4.65 Less: depreciation on consumer contribution 37.60 34.19 34.19 Net Depreciation 277.08 262.04 262.04
Table: Depreciation of DHBVNL for FY 2016-17 (Rs. Crore)
Approved in the MYT Tariff Actual as per HERC Revised Approval Particulars Order dated 01.08.2016 Audited accounts for the FY 2016-17 Opening Gross GFA for the year 7317.14 6610.84 6610.84 Depreciation 325.09 300.42 300.42 Rate of Depreciation 4.44 4.54 4.54 Less: depreciation on consumer 57.47 84.94 84.94
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contribution Net Depreciation 267.62 215.48 215.48
3.1.4 Interest on Consumers Security Deposit
The Commission, vide the MYT Order dated 01.08.2016, had approved interest on consumer security deposit at Rs. 73.68 Crore (UHBVNL) for the FY 2016- 17, as proposed by the licensee.
UHBVNL has now intimated the actual interest paid on consumers’ security deposit as per their audited accounts of the FY 2016-17 is Rs. 71.71 Crore, which is lower than the interest cost already approved by the Commission. The Commission, therefore, approves Rs. 71.71 crores as interest on consumer security deposit for the FY 2016-17 being the amount actually paid by the licensee.
Similarly, in the case of DHBVNL, the Commission had approved Rs. 26.63 Crore as interest on consumer security deposit while the actual expenses, as per the audited accounts, is Rs. 18.63 Crore. The actual expenditure of both the Discoms, being lower than that allowed by the Commission in its MYT Order for the FY 2016- 17, is therefore, approved for true- up of interest on consumers’ security deposit for the FY 2016-17 for both UHBVNL and DHBVNL.
It is further directed to ensure that the interest on consumer securities is given to the consumers in the next billing cycle if not paid earlier. Further, DISCOMs were also directed to submit details of unclaimed Security Deposit of the consumers, where the consumer has discontinued receiving supply from DISCOMs and the action on such unclaimed securities be also taken as per accounting procedure within six months. The above action be completed within six months, otherwise it shall be deemed to be a notice for taking action against the guilty officers/officials under section 142 of the Electricity Act, 2003.
3.1.5 Interest on Capex loans
UHBVNL
The Commission observes that UHBVNL has incurred an expenditure of Rs. 572.44 Crore on additions to capital works as against Rs. 1055.97 Crore approved
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DHBVNL
The Commission observes that the licensee has incurred an expenditure of Rs. 640.93 Crore on additions to the capital works in the FY 2016-17 as against Rs. 1200 Crore approved by the Commission in the MYT Order dated 01.08.2016. The Commission had approved interest on capx loan amounting to Rs. 81.89 crores against which the licensee has incurred an expenditure of Rs. 94.60 crores( net of IDC). The Commission has examined the calculations and observes that the expenditure incurred by the licensee on this account appears to be reasonable and therefore the same is approved for true up for the FY 2016-17. However, the Commission has examined the capital expenditure actually incurred by DHBVNL during the FY 2016-17 as against that approved by the Commission and observes that observes that the same are within the approved limits. Therefore, the actual interest cost of Rs. 94.60 crore is considered for true up.
3.1.6 Interest on Working Capital loan
As the total approved ARR has undergone a change on account of the true- up of expenses that has been approved by the Commission; the admissible working capital loan and interest thereto has been recalculated accordingly in line with the MYT Regulations. The Commission observed that base rate of State Bank of India (SBI) as on 01.04.2016 was 9.30%. The Commission has further allowed a margin of 1.25% on the SBI base rate. Accordingly, while calculating interest on working capital for the FY 2016-17, the rate of interest has been taken as 10.55%. The revised calculation of approved working capital borrowings and Interest cost thereto, for both UHBVNL and DHBVNL, is as under:-
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Table: Interest on Working Capital Loan of UHBVNL (Rs. Crore) Interest on working capital FY 2016-17 O&M expenses for 1 month 100.73 Maintenance spares 1% of opening GFA 63.75 2 months receivables 1798.71 Uncollected revenue (1.5% of receivables ) 107.92 Total 2071.11 Less
Advance Consumers Security Deposit during the year 1024.24 Net working capital 1046.87 Interest rate 10.55% Interest cost (rounded off) 110.44
Table: Interest on Working Capital Loan of DHBVNL (Rs.Crore) Interest on working capital FY 2016-17 O&M expenses for 1 month 102.69 Maintenance spares 1% of opening GFA 66.11 2 months receivables 2171.34 Uncollected revenue (1.5% of receivables ) 130.28 Total 2470.42 Less: Advance Consumers Security Deposit during the year 1098.72 Net working capital 1371.70 Interest rate 10.55% Interest cost (rounded off) 144.71
3.1.7 Interest on UDAY Bonds
Government of India has notified Ujwal Discom Assurance Yojana (UDAY) scheme for operational and financial turnaround of power distribution companies (DISCOMs), on 20th Nov 2015 under which State shall take over 75% of Discom debt as on 30th September, 2015 over two years i.e. 50% of Discom debt shall be taken over in FY 2015-17 and 25% in the FY 2017-18.
The Government of India, the State of Haryana and the DISCOMs of Haryana (Uttar Haryana Bijli Vitran Nigam Ltd. and Dakshin Haryana Bijli Vitran Nigam Ltd.) signed the tripartite Memorandum of Understanding (MOU) under the Scheme UDAY – “Ujwal DISCOM Assurance Yojana” on 11th March 2016 for operational and financial turnaround of the DISCOMs. The implementation of UDAY is expected to lead to changes in the projections of interest and finance charges for the Discoms and have a positive impact on the revenue requirement of the Discoms.
The turnaround is proposed to be achieved through:
Improving operational efficiencies of DISCOMs (AT&C Losses to be 15% & ACS ARR gap to be eliminated by 2018-2019)
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Reduction of cost of power Reduction in interest cost of DISCOMs Enforcing financial discipline on DISCOMs through alignment with State finances
Salient Features of UDAY are listed below:
States shall take over 75% of DISCOM debt as on 30 September 2015 over two years - 50% of DISCOM debt shall be taken over in 2016-17 and 25% in 2017-18 Government of India will not include the debt taken over by the States as per the above scheme in the calculation of fiscal deficit of respective States in the financial years 2016-17 and 2017-18 States will issue non-SLR including SDL bonds in the market or directly to the respective banks / Financial Institutions (FIs) holding the DISCOM debt to the appropriate extent DISCOM debt not taken over by the State shall be converted by the Banks / FIs into loans or bonds with interest rate not more than the bank’s base rate plus 0.1%. Alternately, this debt may be fully or partly issued by the DISCOM as State guaranteed DISCOM bonds at the prevailing market rates which shall be equal to or less than bank base rate plus 0.1%. Reduction of cost of power.
The schedule of takeover of loan has been given as under:-
Break up of State Govt Takeover of Loans
Particulars FY 16 FY 17 FY 18 FY 19 FY 20
Grant (%) 11.25% 11.25% 11.25% 11.25% 11.25%
Grant (Cr) 3,892.5 3,892.5 3,892.5 3,892.5 3,892.5
Equity (%) 3.75% 3.75% 3.75% 3.75% 3.75%
Equity (Cr) 1,297.5 1,297.5 1,297.5 1,297.5 1,297.5
Debt (%) 35.00% 45.00% 30.00% 15.00% 0.00%
Debt (Cr) 12,109.9 15,569.9 10,379.9 5,190.0 0.0
The Commission observes that the UDAY scheme, if implemented properly, will result in all round benefit, ultimately resulting in lower tariff to the consumers
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The Commission has retained the working capital borrowings to the normative level and expects the balance to be met from the OFR support available under UDAY.
3.1.8 Cost of raising Finance and Bank Charges
The Commission had not allowed any expenditure towards cost of raising finance and bank charges to both the Discoms and the same was to be considered as part of the True-up exercise.
As per the audited accounts, UHBVNL has incurred a cost of Rs. 3.35 Crore while DHBVNL has incurred Rs.3.53 Crore on this account. As it is unavoidable cost required for raising the requisite funds, the Commission allows the same to be trued up.
3.1.9 Other Debits
UHBVNL in its ARR for FY 2016-17 as per its True-up petition has included other expenses of Rs. 29.57 Crore as per the details provided in the table below:
Table: Other Expenses UHBVNL (Rs. Crore) 1 Provision for bad and doubtful debts 23.48 2 Compensation for injury , death and damage and penalties 3.91 3 Infructuous Capital Exp. Written Off 0.17 4 Loss on Obsolescence of Stores & Spares 0.24 5 Sundry Debits balances Written Off 0.71 6 Provision for amount recoverable from employees / theft of property 1.06 Total 29.57
The Commission has examined the submission of the licensee and observes that part of other expenses includes provisions for bad debts and other losses amounting to Rs. 24.54 Crore (Sr. No. 1and 6) which are not admissible for true - up of actual expenditure. Hence, after excluding these, the Commissions allows Rs. 5.03 Crore as other debits for True-up.
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DHBVNL has proposed a True-up of other debits of Rs. 200.27 Crore as given in table the table below:-
Table: Other expenses DHBVNL (Rs. Lakhs) Particulars Amount (Rs. Lakhs) 1 Provision for bad and doubtful debts 170.95 2 Refund of revenue other than A.P. 10.81 3 Misc. Loss and written off 18.51 Total 200.27
The Commission has examined the above and observes that part of other debits includes provisions for bad debts (Sr. No. 1) amounting to Rs. 170.95 Crore which are not admissible for True-up of actual expenditure. After excluding the said amount, the Commission allows Rs. 29.32 Crore as other expenses for True-up.
3.1.10 Return on Equity (RoE)
UHBVNL and DHBVNL have proposed True-up of return on equity for the FY 2016-17 amounting to Rs. 352.85 Crore and Rs. 281.17 Crore respectively. The Commission observes that True-up has to be necessarily based on the same principles as were applied while approving the ARR/Tariff for the FY 2016-17. As the Commission had not allowed any RoE in the ARR/Tariff Order dated 01.08.2016, the same cannot be considered as part of the True-up exercise.
3.1.11 Non-tariff Income
The Commission had approved Rs. 174.43 Crore as non - tariff income for the FY 2016-17 as proposed by the UHBVNL and the actual non - tariff income as per audited accounts is Rs. 307.47 Crore. However, the licensee has now submitted that Rs. 74.81 crores, being delayed payment surcharge from the consumers may not be considered as income of the licensee as the same is towards the cost of additional working capital required when the consumers do not pay on time for the bills raised to them. Accordingly, the revised non- tariff income for the FY 2016-17 has been approved at Rs. 232.66 Crore.
Similarly, in the case of DHBVNL, the Commission had approved Rs. 170.01 Crore as non - tariff income for the FY 2016-17 as proposed by them. The actual non
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- tariff income as per audited accounts is Rs. 636.99 Crore. The licensee has now submitted that Rs. 94.14 crores, being delayed payment surcharge from the consumers may not be considered as income of the licensee as the same is towards the cost of additional working capital required when the consumers do not pay on time for the bills raised to them. Accordingly, the revised non- tariff income for the FY 2016-17 has been approved at Rs. 542.85 Crore.
3.1.12 True-up of Power Purchase Cost
The Commission observes that difference in power purchase cost could arise either on account of variation in actual generating source wise quantum or rate of power vis-à-vis those allowed by the Commission on a projected basis. As per the MYT Regulations the Discoms are allowed to automatically recover FSA, without going through the regulatory process, in order to ensure financial viability of the licensees. However, the automatic recovery is subject to a cap and therefore shall necessitate a True-up. Also, the actual cost for the year can only be determined after the audited accounts are available.
The Commission in its Order dated 18.10.2017 in the case of PRO-37 of 2016 had directed as under:-
“The DISCOMs are directed that while claiming true up of Power Purchase cost for the FY 2016-17, the cost incurred on such power shall be shown separately and the same, to the extent of the excess cost incurred by purchasing RE Power instead of REC, shall not be eligible for true up.”
Accordingly, cost of power purchased from M/s. Mittal Processors, over and above Rs. 1.5/unit i.e. cost of purchase of Renewable Energy Certificate, amounting to Rs. 443.06 Crore, has been disallowed.
In view of the aforesaid constraints, the actual power procurement cost is to be trued up based on the normative distributions losses approved by the Commission in the ARR / Tariff Order for the relevant year. Transmission losses are allowed as per actual since the Discoms have no control over these losses.
The details of True-up of power purchase cost of the Discoms for the FY 2016-17 is as per the table below.
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Table: True-up of Power Purchase Cost (FY 2016-17) Particulars UHBVNL DHBVNL Total Sales as per Audited accounts ( excluding interstate and banking) MU 1 13,960.20 19,811.92 33,772.12
Less AP sales included in above MU 2 4,026.71 5,034.95 9,061.66
Sales as per audited accounts ( net of AP sales) MU 3 9,933.49 14,776.97 24,710.46
Add AP sales approved by the Commission MU 4 4,026.77 4,962.25 8,989.02
Approved/Audited sales adjusted for AP MU 5 13,960.26 19,739.22 33,699.48 Approved Distribution losses % 6 25.20% 21.70%
Sales grossed up for Distribution losses MU 7 18,663.45 25,209.73 43,873.18
Actual Interstate sales and banking MU 8 1,634.42 2,279.22 3,913.64
Total power sold including inter-state sale and banking Mu 9 20,297.87 27,488.95 47,786.82 Intrastate & Interstate transmission losses as per audited accounts MU 10 818.44 1,065.70 1,884.14 % 3.88% 3.73% 3.79% Approved power purchase volume (Sales grossed up for Intrastate & Interstate transmission losses) MU 11 21,116.31 28,554.65 49,670.96
Actual Power Purchase Volume MU 12 22,355.67 28,908.03 51,263.70
Disallowed Units MU 13 1,239.36 353.38 1,592.74 Rs. Cost of disallowed units at variable cost @2.462 Crore 14 305.13 87.00 392.13 Rs. Two third to be borne by the Discoms Crore 15 203.42 58.00 261.42 Rs. One third to be borne by the consumers Crore 16 101.71 29.00 130.71 Thus, out of total power purchase cost incurred by DISCOMs, only 2/3rd determined above shall be disallowed and the remaining actual cost shall be allowed Calculation of actual cost to be considered by the Commission Actual cost incurred by DISCOMs during the FY 2016-17 Rs. (incl HVPNL and SLDC charges) Crore 17 10256.12 13001.35 23257.47 Less Reactive Energy Charges forming part of power purchase cost 18 2.97 -0.13 2.84 Less Cost of procurement of Mittal Hydro RE Power disallowed 19 199.49 243.58 443.06 Net cost to be considered 20 10053.67 12757.90 22811.57 Rs. Less two third cost of losses to be borne by the Discom Crore 21 203.42 58.00 261.42 Rs. Net power purchase cost admitted by the Commission Crore 22 9850.25 12699.90 22550.15
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Particulars UHBVNL DHBVNL Total Less: Revenue from Inter-state Sale and Banking, as per Rs. audited a/cs Crore 23 524.84 749.80 1274.64 Net power purchase cost admitted by the Commission, after accounting for revenue from inter- Rs. state sale and banking Crore 24 9325.41 11950.11 21275.51 4.17 4.13 4.15 Power purchase cost allowed in the ARR order 01.08.2016:- Approved power purchase cost after accounting for Rs. inter-state sale and banking (incl HVPNL and SLDC) Crore 25 8190.41 11300.78 19491.19 3.88 3.96 3.92 Rs. True up of Power purchase cost Crore 1135.00 649.32 1784.32
3.1.13 Revenue from Sale of Power for the FY 2016-17
As per audited accounts for FY 2016-17, the two distribution licensees have recovered revenue from sale of power of Rs. 14778.33 Crore as against Rs. 16063.00 Crore estimated by the Commission. The True-up of revenue from sale of power for the FY 2016-17 is as given in the table below.
Table: Revenue from sale of power for the FY 2016-17 ( Rs. Crore) Revenue for the FY 2016-17 UHBVNL DHBVNL TOTAL Revenue from sale of power as per audited accounts 6022.38 8494.76 14517.14 Revenue from Fixed Charges 614.52 957.08 1571.60 FSA 1425.92 2146.40 3572.32 Total 8062.82 11598.23 19661.05 Less FSA for the previous years recovered in FY 2016-17 2256.19 Net revenue to be considered for true up for the FY 2016-17 17404.86
3.1.14 Revised ARR for the FY 2016-17
In view of the above analysis, the Commission approves the revised ARR for UHBVNL and DHBVNL as per the details provided in the table(s) below.
Table: True-up of UHBVNL for the FY 2016-17 (Rs. Crore) Particulars Approved Actual Revised ARR for FY 2016-17
Power purchase cost 8190.41 10256.12 9325.41 Operations and Maintenance Expenses 1143.30 1227.28 1208.76 Employee Expense 538.35 647.39 647.39 A&G Expense 80.43 96.41 77.89
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Particulars Approved Actual Revised ARR for FY 2016-17 R&M Expense 117.70 62.42 62.42 Terminal Liability 406.82 421.06 421.06 Depreciation 277.08 262.04 262.04 Net Interest on term loan 57.35 131.67 131.67 Interest on Security Deposit 73.68 71.71 71.71 Interest on Working Capital 114.00 232.59 112.22 Cost of raising finance and bank charges 0.00 3.35 3.35 Interest on Bonds -HVPNL Bond 0.00 75.61 0.00 -FRP Bond 0.00 144.53 0.00 -UDAY 0.00 630.99 0.00 Total Interest and Finance Charges 245.03 1290.45 318.95 True up of expenses of previous year 0.00 0.00 0.00 Other Debits 0.00 29.57 5.03 Prior period debits/ credits 0.00 0.00 0.00 Return on Equity Capital 0.00 0.00 Total Expenditure 9855.82 13065.46 11120.18 Income/Reciepts Non Tariff Income -174.43 -307.47 -232.66 Revenue subsidy from Govt. (excluding FSA subsidy) 0.00 -3965.31 0.00 ARR 9681.39 8792.68 10887.52
Table 3.14 True-up of DHBVNL for FY 2016-17 (Rs. Crore) Particulars Approved Actual Revised ARR for FY 2016-17
Power purchase cost 11300.79 13001.35 11950.10 Operations and Maintenance Expenses 1171.04 1239.75 1232.24 Employee Expense 629.03 669.34 669.34 A&G Expense 73.86 82.18 74.67 R&M Expense 132.77 68.23 68.23 Terminal Liability 335.38 420.00 420.00 Depreciation 267.62 215.48 215.48 Net Interest on term loan 81.89 94.60 94.60 Interest on Security Deposit 26.63 18.63 18.63 Interest on Working Capital 108.00 307.78 146.95 Cost of raising finance and bank charges 0.00 3.53 3.53 Interest on Bonds -HVPNL Bond 0.00 73.88 0.00 -FRP Bond 0.00 0.12 0.00 -UDAY 0.00 461.21 0.00 Total Interest and Finance Charges 216.52 959.75 263.71
True up of expenses of previous year 0.00 0.00 0.00 Other Debits 0.00 200.27 29.32 Prior period dibits/ credits 0.00 0.00 0.00 Return on Equity Capital 0.00 0.00 Total Expenditure 12955.97 15616.60 13690.85 Income/Reciepts
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Non Tariff Income excl. delaymet pmt surch -170.01 -636.99 -542.85 Revenue subsidy from Govt. (excluding FSA subsidy) 0.00 -2643.54 0.00 ARR 12785.96 12336.07 13148.00
3.1.15 True-up of RE Subsidy for the FY 2016-17
The Commission had determined RE subsidy of Rs. 5933.54 Crore payable by the State Government to the Discoms for the FY 2016-17 based on an estimated CoS of Rs. 6.64 ( CoS on LT supply) per unit for A.P. supply of 9094 MU. As the total ARR has now been revised because of the True-up of the FY 2016-17 and the quantum of power supplied to AP consumers during the FY 2016-17 has also been revised to 8989.02 MUs, based on actual; the subsidy for AP supply payable by the State Government also needs to be revised to reflect the corresponding changes in the quantum and cost of the AP tube-well consumers.
The final revenue gap, on account of true-up along with carrying cost has been taken forward in the approved ARR for the FY 2018-19. The details are as per table given below.
Table: True up for FY 2016-17 Sr. no. Total ARR for FY 2016-17 As per Order Revised 1 UHBVNL 9681.39 10887.52 2 DHBVNL 12785.95 13148.00 3 Total ARR for FY 2016-17 22467.34 24035.52 4 Revenue gap for FY 2014-15 672.14 403.40 5 Carrying cost on above for 1 year six months 168.04 75.64 6 Total Revenue requirement for FY 2016-17 23307.52 24514.56 7 Revenue at current tariff 18328.16 0.00 8 Total Sales for FY 2016-17 35981.04 33699.48 9 Average COS 6.48 7.27 10 Cost of Supply for AP consumers 6.64 11 Adjusted Cost of Supply for AP consumers 7.46 12 Revenue from AP consumers 104.880 163.02 13 Subsidy for AP supply 5933.54 6539.82 14 Revenue from sale of power 17404.86 15 Net revenue gap for the FY 2016-17 406.86 Unrecovered FSA as on 31.3.2017 as per Order 16 dated 3.3.2017 828.40
3.1.16 Fuel Surcharge Adjustment
The Commissions, in the True- up of the FY 2016-17 has Trued-up the power
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3.2 ARR Determination for the FY 2018-19
The ARR for the FY 2018-19 filed by the Discoms have been considered and Commission’s analysis and Order on each of the expenditure items are given in the paragraphs that follow.
3.2.1 Agriculture Tube Well Sales for the FY 2016-17, FY 2017-18 (revised) & FY 2018-19 (projected)
The Commission has examined the submissions of the Discoms (UHBVNL and DHBVNL) regarding AP sales for the FY 2016-17, FY 2017-18 and FY 2018-19 as under:-
Sales Projection / Estimation Methodology
Prior to segregation of AP feeders in the FY 2009-10, estimation of AP sales was being done by the Commission based on the Annual Average Load Factor (ALF) i.e. ALF of metered AP sales applied to the projected connected load of metered as well as unmetered AP consumers. However, this methodology suffered from the limitations due to the fact that large numbers of AP meters were dead & defective and the connected load particularly of the unmetered category was far from accurate thereby distorting the ALF itself. Hence, actual AP sales claimed by the
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Discoms and those arrived at by using the ALF methodology were at variance. Thus, upon segregation of AP feeders at 11 kV, the Commission considered it appropriate to change the methodology of estimating AP sales as the actual consumption recorded on segregated 11 kV AP feeders during the previous year provided a firm starting point for estimating sales. However, as the sales has to be estimated at the tube-well consumers end and the fact that there are still significant number of un- metered AP consumer and reliability of meters installed at the metered AP consumers tube-well due to a large number of such meters being dead/defective, was doubtful. Hence, the Commission, after analysing the data in entirety, arrived at a loss factor of 16% between the energy recorded at the 11 kV feeders and point of sales to estimate AP sales at consumers’ end. The said loss factor has been continued with as it is also corroborated by the difference in input energy on segregated AP feeders and the energy actually billed at the consumers end
Further, as certain numbers of AP connections are added during the year the expected load growth was also built into the AP sales estimation methodology. As this methodology is more scientific and minimises estimation errors, the Commission has considered it appropriate to continue with the same methodology in the present Order. Accordingly, the prudent analyses for the true up for the FY 2016-17, revised estimated for the FY 2017-18 and projected for the FY 2018-19 in respect of AP sales of both the Discoms has been carried out are as given in the following paragraphs.
3.2.2 True up of AP Sales for FY 2016-17 (True-up of RE Subsidy)
On initial scrutiny of the ARR petition (s), the Commission had observed that the month wise data of AP consumptions recorded on segregated AP feeders and consumption of AP consumers fed from other feeders was not provided. Accordingly, the Discoms, vide memo dated 18.03.2018 and 29.06.2018, were asked to submit data on AP consumption along with other information pertaining to ARR filing. The Discoms, subsequently, submitted the complete AP sales data of segregated AP feeders for the FY 2016-17, which has been taken into account for the purpose of present estimation.
In the ARR filings the Discoms had submitted the following data in respect of AP sales for the FY 2016-17:-
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Sr. No. AP sales (MUs) FY 2016-17 1 In respect of UHBVNL 4026.71 2 In respect of DHBVNL 5034.95 3 Total AP Sales of two Discoms (1+2) 9061.66
However, on perusal of the AP sales data for the FY 2016-17, subsequently submitted by the Discoms, AP consumption of the two licensees has been worked out as under:-
AP consumption (MUs) UHBVN DHBVN (2016-17) (2016-17) AP units as recorded on segregated AP feeders (In MUs) 4795.75 5950.71 Loss @ 16% 767.32 952.11 Net consumption from AP feeders 4028.43 4998.60 Add AP units on other feeders 56.67 129.59 Less Consumption of other category consumers on segregated AP feeders 18.42 93.05 Total AP consumption 4066.17 4962.25 Total AP consumption of two Discoms (rounded off) 9028 Total AP consumption approved by Commission in its tariff Order dated 11.07.2017 9028.00
The approved AP consumption for the FY 2016-17 worked out as above from the data submitted by the Discoms is in line with the AP consumption approved by the Commission for FY 2016-17; however, the UHBVNL in its ARR filing has submitted actual AP consumption as 4026.77 MUs against 4066.17 MUs as worked out with the methodology adopted by the Commission. The Commission deemed it appropriate to consider the AP sales of UHBVNL for FY 2016-17 as per its ARR filing i.e. 4027 (rounded off) being on lower side. Accordingly, the total AP sales in respect of both the Discoms has been worked out as 8953 MUs (UHBVNL- 4027 MUs and DHBVNL- 4926 MUs) for the FY 2016-17. As such, for the purpose of true up of RE subsidy for the FY 2016-17, the trued up AP consumption has been taken as 8953 MUs.
3.2.3 AP Sales Estimation for the FY 2017-18 & FY 2018-19
Assuming an annual growth of 5% over the actual AP consumption calculated for the FY 2017-18, the Discoms, in their Annual Performance Review petitions for the FY 2017-18 (including projected Annual Revenue Requirement for FY 2018-19 and True-up for the FY 2016-17) have indicated the AP consumption for the FY 2017-18 and the FY 2018-19 as under:- Sr. No. AP sales (MUs) FY 2017-18 FY 2018-19 1 In respect of UHBVNL 4270.02 4483.52 2 In respect of DHBVNL 5286.70 5551.04
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Sr. No. AP sales (MUs) FY 2017-18 FY 2018-19 3 Total AP Sales of two Discoms (1+2) 9556.72 10034.56
Whereas, the Commission in its tariff Order dated 11.07.2017 had considered and approved AP consumption of both Discoms for the FY 2017-18 to the tune of 9193 MUs (4140 MUs for UHBVNL and 5053 MUs for DHBVNL) considering a growth of 1.83 %.
The AP sales data emanating from the 11 kV AP segregated feeders for the FY 2017-18, as provided by the Discoms, have been worked out as under after adjusting with a loss factor of 16% as per the methodology previously mentioned in the present Order:-
AP consumption (MUs) UHBVNL DHBVNL (2017-18) (2017-18) AP units as recorded on segregated AP feeders (In MUs) 4688.38 6336.74 Loss @ 16% 750.14 1013.88 Net consumption from AP feeders 3938.24 5322.86 Add AP units on other feeders 48.18 134.45 Less Consumption of other category consumers on segregated AP 26.15 68.21 feeders Total AP consumption 3960.27 5389.09 Total AP consumption of two Discoms (rounded off) 9350 Total AP consumption approved by Commission in its tariff Order dated 9193 11.07.2017
It has been observed that the AP consumption for the FY 2017-18 in respect of UHBVNL has declined southwards by about 106 MUs, whereas, in case of DHBVNL the sales has peaked northwards by about 427 MUs in comparison to the AP consumption approved by the Commission in its ARR/Tariff Order dated 11.07.2017. Therefore, total AP consumption for the FY 2017-18 in respect of both the Discoms has increased to 9350 MUs. The Commission observed that the load of AP category (from the FY 2013-14 to FY 2017-18) had grown at the CAGR of 3.80 % and 2.61 % in DHBVNL and UHBVNL respectively.
Total Load ( in KW) FY 13-14 FY 14-15 FY 15-16 FY 16-17 FY 17-18 CAGR UHBVNL 3067450 3161898 3260205 3343499 3401024 2.61%
DHBVNL 2841824 3016063 3117068 3190667 3299128 3.80%
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The above factors have attributed to the increase in AP sales for the FY 2017- 18 which was initially projected by applying a factor of 1.83 % on the approved AP sales of FY 2016-17 in the ARR/tariff order 11.07.2017 of the Commission.
Accordingly, the Commission has considered it appropriate to revise the AP consumption for FY 2017-18 to 9193 MUs against 9350 MUs approved by the Commission in the ARR/Tariff Order dated 11.07.2017.
From on the above data it is however noticed that the there is significant difference in the AP category supply hours in the UHBVNL and DHBVNL. AP category supply hours for UHBVNL and DHBVNL has been worked out as 3.25 hrs and 4.62 hrs respectively considering the above sales and connected load at the end of FY 2017-18. This kind of difference in supply hours needs further examination. The Commission directs the Discoms to engage a third party for authenticating the AP sales data of both Disoms for the FY 2017-18 and supply hours vis-a-vis reasons of variance in supply hours and to submit analysis report at the time of next ARR filling.
It is also apparent from the tables above that the Discoms have projected AP sales during the FY 2017-18 and FY 2018-19 on the higher side for the FY 2017-18 vis-a-vis that estimated by the Commission and has further escalated the same by 5% to arrive at the estimated figure for the FY 2018-19.
The data submitted by the Discoms (from the FY 2014 to FY 2018) reveals that the AP load is growing at the CAGR of 3.19 %. However, on the other side, the AP consumption is growing at the CAGR of 2.404 % and as such AP sales are expected to grow accordingly. The relevant data is as under:- Period FY 14-15 FY 15-16 FY 16-17 FY 17-18 CAGR Total AP sales of Discoms (MUs) 8707 8907 8953 9350 2.404%
In view of the above, the Commission considers it appropriate to take into account an annual load growth of 2.404 %, as worked out from the AP consumption data projected by the Discoms for projecting the future AP sales for the FY 2018-19. Accordingly, the Commission allows following revised AP sales for the two Distribution Licensees for the FY 2017-18 and FY 2018-19.
Sr. No. AP sales (MUs) FY 2017-18 FY 2018-19 1 In respect of UHBVNL 3960 4055
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2 In respect of DHBVNL 5390 5520 3 Total AP Sales of two Discoms (1+2) 9350 9575
3.2.4 Sales Estimation (Metered other than AP Tube-well)
The Commission observes that the Discoms have relied on CAGR of previous year’s sales data for projecting consumer category wise sales for the FY 2017-18 and the FY 2018-19 using base year as the FY 2016-17. Similarly, connected load has been projected based on CAGR of 3 to 5 years.
The Commission has considered the above and is of the view that CAGR of time series data fields a realistic estimate; hence, the methodology is in line with the previous order (s) of the Commission. The Commission, however, has used CAGR of 3 to 4 years so as to capture the recent growth trend in sales with appropriate adjustments in sales as well as connected load in case of major aberrations in the underlying data.
The connected load and inter-se allocation of sale between sub-categories has been considered based on information made available by the Discoms.
Accordingly, the Commission approves consumer category wise energy sales for the FY 2018-19 as per the details provided in the table below.
Table: Approved Sales FY 2018-19 (MUs) Consumer Category Discoms Projection (MU) HERC Approved (MU) UHBVN DHBVN UHBVN DHBVN Domestic (DS) 3,616.12 5,141.09 3561.44 5269.85 Non Domestic 1,384.56 3,006.65 1381.39 3006.42 HT Industry 4,041.52 5,162.83 3867.50 5162.83 LT Industry 924.38 976.44 941.05 981.11 Lift Irrigation 44.94 174.51 45.23 157.32 Agriculture 4,483.52 5,551.04 4055.00 5520.00 Bulk Supply 309.30 727.62 308.20 676.60 Railway Traction 35.92 143.73 196.57 200.94 Street Light 51.95 95.74 53.34 95.74 MITC 15.51 643.75 12.65 - Public Water Works 390.23 21,623.39 428.83 527.08 Total 15,297.95 5,141.09 14851.20 21697.89
The consumer category wise sales approved by the Commission are based on CAGR as previously mentioned. Further, given the surplus power availability in Haryana there may not be any need to purchase short-term power or drawl under UI
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3.2.5 Power Purchase volume
3.2.5.1 Projections by UHBVNL / DHBVNL
The Discoms have submitted that the energy availability in Haryana State periphery has been projected based on the allocated share to Haryana form the Central Generating Stations, State Generation, Independent Power Producers and other Generating Stations. It has been further submitted that the energy availability from all these sources have been estimated based on the average PLF of the FY 2014-15 to the FY 2016-17. The impact of Interstate losses on the Interstate Generating stations has also been taken while calculating the availability at the State periphery. Accordingly, the total power availability for the FY 2018-19 from all external and internal sources has been projected by the Discoms at 52483.55 MUs.
3.2.5.2 Commission’s Estimate of Power Purchase Quantum
The Commission has considered the methodology for projecting power purchase quantum for the FY 2018-19 by the Discoms based on averages and observe that the same may not provide an accurate measure of power availability. The Commission, as per past practice, is of the considered view that each year the Central Electricity Authority (CEA) publishes annual generation programme i.e Gross Generation Programme from conventional sources (Thermal, Hydro and Nuclear) stations of 25 MW and above which is also available in the public domain i.e. www.cea.nic.in/reports/others/god/opm/targets_1819.pdf. The said, power station wise monthly Generation Programme is prepared by CEA, based on the actual generation by the Stations during previous years, maintenance schedules furnished by the Stations for the year 2018-19 and anticipated new capacity additions during the year. Despite the fact that there could be variations in the actual month wise actual generation vis-à-vis the targets due to various factors including forced shutdowns and changes in individual Station’s actual maintenance schedules as well as actual commissioning of new capacities and constraints in availability of specific sources like hydro or gas etc. The Commission believes that the generation
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(a) CEA’s generation target for FY 2018-19 for thermal power stations, hydro and nuclear power stations for which generation targets have been determined.
(b) Allocated share of Haryana in the respective generating stations have been considered for arriving at the quantum of power that is expected to be available to Haryana from various sources.
(c) Past trend of actual generation achieved vis-a-vis CEA’s generation targets.
(d) HPGCL’s generation targets as approved by the Commission for FY 2018-19 vide Order dated 31st October, 2018 in Case No. HERC/PRO-81 of 2017.
(e) Expected generation targets from new generating stations as proposed by the Discoms.
(f) CEA’s gross generation targets, wherever considered, has been adjusted for auxiliary energy consumption and home state share (hydro) as per standard norms.
In line with the broad methodology spelt out above, the Commission, for the FY 2018-19, has proceeded as follows.
It is presumed that the Discoms have a valid PPA duly approved by the Commission for all the proposed sources of power for which approval has been sought. Hence, in no manner the sources, as considered by the Commission, in its present Order, should be construed as approval of PPA unless the Commission, vide a specific order has accorded approval to the PPAs. The Commission further observes that the Discoms, for estimating the sources of power / quantum in the FY 2018-19, has included generating stations like Kotli Bhel, Teesta III (Sikkim IPP) and new plants etc. without approval of PPA from the Commission. Hence, such sources have not been considered by the Commission. i) Availability of power from HPGCL
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The Commission has considered power availability at the bus bar from HPGCL sources as per its Order dated 31st October, 2018 in Case No. HERC/PRO- 81 of 2017 in the matter of HPGCL’s Petition on determination of HPGCL’s Generation Tariff for the FY 2018-19 The details / assumptions of the same are mentioned in the said Order. Hence, for the sake of brevity, they are not being re- produced here.
The power availability (ex–bus energy in MUs) from HPGCL’s Power Plants as determined by the Commission in its Order dated ibid Order is presented in the table below:-
Particulars Discoms Proposal HERC Approval HPGCL 11458.08 17234 ii) Availability of Power from Faridabad FGPP
The Discoms Power Purchase Agreement (PPA) with 432 MW Faridabad gas based power station of NTPC expired on 31.12.2015. On the petition filed by the HPPC the Commission passed the Order dated 5.10.2106 as under:-
“….the Commission considers it appropriate to approvethe PPA with Faridabad Gas Power Plant (NTPC) up to 31st December, 2025, as proposed by theHPPC/NTPC subject to the following conditions:- i) Draft PPA for the above period shall be amended suitably as per the observations communicated by the Commission in the matter. ii)HPPC/Discoms shall schedule power on APM Gas only. iii) NTPC shall be free to sell, to a third party outside Haryana, any power that may be generated by NTPC using fuel other than APM Gas. To that extent, the fixed cost liability of HPPC shall be accordingly reduced. The condition 4.0 (para 4) of the PPA shall be modified suitably”.
In view of the ibid order it is reiterated that other than generation to the extent of APM gas usage / available NTPC may sell power to a third party under intimation to HPPC / Discoms and pass on the requisite benefits in reduction of fixed cost to HPPC / Discoms. The Discoms are directed to get an assessment APM Gas available to NTPC in the FY 2018-19 and the FY 2019-20 for its various gas based power plants in which Haryana has allocated share i.e. Anta, Auraiya, Dadri, Faridabad Gas etc.
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As FGPP is a generating station dedicated to Haryana, the Commission, based on generation target finalized by CEA net of auxiliary energy consumption, has considered 926 MUs to be available to the Discoms in the FY 2018-19. This approval is subject to the ibid Order of the Commission. The Commission's approved volume of power from FGPP is as under:-
Faridabad Gas Power Project (NTPC) (MU) Particulars Discoms Proposal HERC Approval Faridabad CCGT 1192.21 926 iii) Availability of power BBMB (Bhakra, Dehar & Pong)
The Discoms have share (to the extent of shares owned by HVPNL) in capacity entitlement to the extent of 33.02% in Bhakra, 32.02% in Dehar, 16.67% in Pong (all BBMB stations). The Commission has considered the CEA’s generation targets for the BBMB Stations, adjusted for auxiliary energy consumption, for the FY 2018-19 available separately for Bhakra & Upratings, Dehar and Pong, Accordingly, the Commission approves as under:-
Power Availability from BBMB (MUs) Particulars Discoms Proposal HERC Approval BBMB 2831.27 2891 iv) Availability of power from NTPC Power Stations
The Commission has considered the station wise gross generation targets fixed by the CEA for the FY 2018-19 and reduced the same by normative auxiliary energy consumption. Accordingly, corresponding to the allocated share of Haryana in the various power stations of NTPC the Commission approves the quantum of power as per table under:-
Power Purchase Volume from NTPC NTPC HERC Approval (MU) Singrauli STPS 1296 Rihand STPS I 431 Rihand STPS II 378 Rihand STPS III 372 Unchhahar TPS I 74 Unchhahar TPS II 155 Unchhahar TPS III 79 Anta CCPP 36 Auraiya CCPP 28
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NTPC HERC Approval (MU) Dadri CCPP 92 Faridabad CCPP 926 Farakka STPS 80 Kahalgaon I STPS 109 Kahalgaon II STPS 331 Kol Dam HPS 152 v) Availability of Power from NHPC Power Plants
The Commission, for projecting power availability from NHPC sources in the FY 2018-19 has relied upon generation targets fixed by the CEA after adjusting the same for auxiliary energy consumption and home State share. The generating station wise details are as under:-
Power purchase volume from NHPC (Hydro) NHPC HERC Approval (MU) Salal I HPS 442 Bairasiul HPS 133 Tanakpur HPS 25 Chamera I HPS 330 Chamera II HPS 73 Chamera-III HPS 80 Dhauliganga HPS 55 Dulhasti HPS 103 Uri HPS 142 Uri-II HPS 63 Sewa II HPS 28 Parbati-III HPS 56 vi) Availability of Power from NPCIL sources
The Commission observes that the CEA has determined generation targets for the FY 2018-19 in the case of power stations of the Nuclear Power Corporation. Hence, power availability from NPCIL (NAPP and RAPP) to the Discoms have been accordingly approved as under:-
Power Purchase Volume from NPCIL Particulars Discoms Proposal (MU) HERC Approval (MU) NAPP 181.85 180 RAPP (3,4,5,6) 545.49 545 vii) Power Purchase from Other Sources
(a) Power Procurement from a few other sources proposed by the Discoms include CGPL, Mundra (UMPP), Sasan UMPP, APCL, DVC (Mejia B, Koderma &
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Raghunathpur), Adani Power Ltd., Mundra, THDC, MGSTPS (CLP), Lanco Amarkantak, Teesta III etc. The Commission has considered the CEA generation targets for the FY 2018-19 wherever available. In cases where generation targets are not available the proposals of the Discoms / past trend have been approved.
(b) The Commission has not considered the power from Pragati Gas Power Plant, Bawana, Delhi being costly on the merit order and also the PPA, so far, has not been approved by the Commission. Further power availability from Teesta III HEP (Sikkim) and Unchahar IV (NTPC under shut down), Parbati II, Kishanganga and Kotlibhel has not been considered for the purpose of estimating power availability in the present case.
(c) Availability of Power from Independent Power Producers/PTC
In addition to the power available from Central Sector, State Sector and Shared Utilities, the Discoms have projected availability of power from PTC Tala, PTC J&K, PTC Karcham Wangtoo and Lanco Amarkantak etc. The Commission has estimatyed availability of power from these sources as per the generation targets fixed by CEA for the FY 2018-19. In case the same is not available for any generating station(s) the same has been taken as per Discoms projections. The generating station wise details provided are as per table that follows.
Availability of Power from PTC & Other Long Term Sources Particulars Discoms Proposal (MU) HERC Approval (MU) PTC J&K (Baglihar HEP) 264 PTC Lanco Amarkantak TPS (Unit – 2) 1840 PTC JSW Karcham Wangtoo HEP 818 PTC GMR Kamalanga TPS 1611 Tala HPS 51 DVC Mejia 491 DVC Koderma 274 DVC Raghunathpur 636 CGPL Mundra UMPP 2425 Sasan UMPP 3000 IGSTPP (Aravali) Jhajjar 2406 Adani Power Ltd. 9824 MGSTPS (CLP) Jhajjar 3441 viii) Availability of Power from Renewable Energy Sources
The Commission is committed to encourage cogeneration and non- conventional fuel based generation including solar generation projects. Hence, the power purchase volume from such sources has been determined keeping in view the
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Availability from Renewable Energy Sources Particulars Discoms Proposal (MU) HERC Approval (MU) P&R Gogripur HEP 9.72 10 Bhoruka Power HEP 29.15 29 Puri Oil Mills HEP 13.64 14 Naraingarh Sugar Mills Ltd. 111 Biomass Power Projects 143.06 143.06 Cogeneration (Bagasse) 271.94 162 Solar Power Projects 21.27 198.87 Total 488.78 666.87
3.2.6 Total Approved Power Purchase Quantum
Based on the above source wise approvals of quantum of power expected to be available in the FY 2018-19, the Commission determines power availability both from inter-state and intra-state generators of 55259 MUs (rounded off).
3.2.7 Power Purchase Cost
The cost of power purchased by the Discoms is mostly a known parameter as the same is governed by the Power Purchase Agreement(s) with the IPPs/electricity traders. In the case of Central Power Sector Units (CPSU's) or generators supplying power to more than one State, the tariffs as approved by the Central Electricity Regulatory Commission (CERC) are applicable. While in the case of State Projects, i.e. HPGCL the generation tariff is determined by the HERC. Most of the elements constituting the total cost of generation i.e. capacity charges, base energy related charges, adjustment of base energy charges for cost of fuel and other factors, taxes, duties, incentive payments etc. are well defined and can be estimated with a reasonable degree of accuracy.
It has been submitted that for arriving at Energy Charge for the FY 2018-19, the actual Variable Charges of first six months of FY 2017-18 has been multiplied with the estimated energy scheduled for the FY 2017-18. For calculating the Variable Cost of power purchase for the FY 2018-19, the plant wise per unit cost of Power
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Purchase of FY 2017-18 has been escalated at an average rate of 5% and multiplied with the total estimated energy drawn from various generators as per the Merit Order dispatch to arrive at the total variable cost of power generation for FY 2018-19. Similarly, the fixed charges paid to the generators in FY 2016-17 are escalated at an average rate of 5% to arrive at the fixed charges to be paid for FY 2017-18 and FY 2018-19.
Further, it has been submitted that the Hon’ble CERC through its various judgements has allowed certain generators like Adani Power, and CGPL recoveries on account of change in law etc. It is submitted that Licensee has already made payment of Rs. 1508.14 Cr, therefore the same has been included in the power purchase cost of FY 2017-18. Further, the monthly impact based on the bills of Adani Power on account of above works out to Rs 0.13 per unit, accordingly the licensee has increased the per unit cost of power purchase for the purpose of estimation of Cost of power purchase from Adani Power in FY 2017-18 and FY 2018-19.
The additional power purchase cost due to the impact of Hon’ble CERC Judgment works out to Rs 657.69 Cr for UHBVN and Rs 850 .45 Cr for DHBVN respectively which has been added in the overall projected power purchase cost in the FY 2017-18.
DHBVNL has submitted that the Actual Variable Charges of FY of FY 2016-17 has been escalated at an average rate of 5% per year to arrive and multiplied with the total estimated energy drawn from various generators to arrive at the total variable cost of power generation for FY 2017-18, however for FY 2018-19 the variable cost has been kept at same levels as that of FY 2017-18. The same has been projected in view of Licensee’s attempt for better power purchase planning, load forecasting and coal rationalizing as per UDAY scheme. Further, For FY 2017- 18, the approved per unit cost of power purchase from HPGCL as approved by the Commission has been considered. As per its submission, DHBVNL has stated that in the FY 2018-19, Generation from various units of HPGCL and their cost is based on the inputs received from HPGC and also that it reserves the right to change the filed numbers based on the outcome of the Tariff Order on the Tariff petition filed by HPGCL.
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The Commission has considered the methodology adopted by the Discoms for projecting cost of power for the FY 2018-19 and observes as under:-
The cost of allowed power purchase for the FY 2018-19 has been determined largely keeping in view the provisions of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 read with the subsequent amendments.
i) Generating Station wise fixed cost of power is based on the actual fixed cost incurred by the Discoms in the FY 2017-18 escalated by 5%.
ii) Generating Station wise Fuel / Variable Cost is based on the average of the actual variable charges / energy charges incurred by the Discoms from April, 2017 to September, 2017 i.e. for the period data was available.
v. The cost of power purchase from HPGCL has been considered as per the Commission’s Generation Tariff Order for the FY 2018-19.
The details of approved power purchase rates (Rs/kWh), cost (Rs.Million) and quantum (Million Units), from various sources for the FY 2018- 19 are presented in the table below.
Source Estimated Annual Fixed Variable Charge Variable Charge Total Charge Quantum (MU) Charge (Rs millions) (Rs/kWh) (Rs. Million) (Rs. Mln) NTPC Singrauli STPS 1296 928.762 1.37 1776 2704.762 Rihand STPS I 431 391.139 1.3 561 952.139 Rihand STPS II 378 356.330 1.3 492 848.330 Rihand STPS III 372 621.132 1.3 483 1104.132 Unchhahar TPS I 74 86.320 2.7 200 286.320 Unchhahar TPS II 155 162.783 2.7 419 581.783 Unchhahar TPS III 79 113.921 2.8 220 333.921 Anta CCPP 36 122.116 2.44 87 209.116 Auraiya CCPP 28 195.713 3.75 105 300.713 Dadri CCPP 92 169.739 3.48 318 487.739 Faridabad CCPP 926 2346.935 3.69 3418 5764.935 Farakka STPS 80 79.764 2.26 180 259.764 Kahalgaon I STPS 109 187.246 2.24 244 431.246 Kahalgaon II STPS 331 551.857 2.03 672 1223.857 Kol Dam HPS 152 760.748 2.5 379 1139.748 NHPC 0.000 Salal I HPS 442 798.000 1.08 478 1276.000 Bairasiul HPS 133 221.572 0.62 82 303.572 Tanakpur HPS 25 50.234 1.65 41 91.234 Chamera I HPS 330 330.563 1.14 377 707.563 Chamera II HPS 73 94.979 0.78 57 151.979 Chamera-III HPS 80 239.725 2.12 169 408.725
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Source Estimated Annual Fixed Variable Charge Variable Charge Total Charge Quantum (MU) Charge (Rs millions) (Rs/kWh) (Rs. Million) (Rs. Mln) Dhauliganga HPS 55 107.271 1.21 66 173.271 Dulhasti HPS 103 369.403 2.75 284 653.403 Uri HPS 142 172.742 0.82 116 288.742 Uri-II HPS 63 271.090 2.37 148 419.090 Sewa II HPS 28 85.198 2.16 61 146.198 Parbati-III HPS 56 160.828 2.74 154 314.828 SJVNL (Nathpa Jhakri) 0 0.000 SJVNL (Nathpa Jhakri) 280 378.238 1.21 338 716.238 HPS Rampur HPS 69 161.486 1.61 111 272.486 THDC Tehri (THDC) HPS 197 576.587 2.66 523 1099.587 Koteshwar HPS 48 100.901 1.95 94 194.901 NPC 0 0.000 NAPP (Narora) 180 3.2 576 576.000 RAPP 545 0.217 3.66 1995 1995.217 HPGCL (as per HERC) 17234 17279.500 3.36 57905 75184.500 Shared Project 0 0.000 BBMB HPS 2891 0.6 1734 1734.000 DVC 0 0.000 Mejia TPS 491 874.863 2.39 1175 2049.863 Koderma TPS 274 1090.622 1.9 521 1611.622 Raghunathpur TPS 636 362.712 2.27 1444 1806.712 UMPP 0 0.000 CGPL Mundra UMPP 2425 2503.120 1.7 4123 6626.120 TPS Sasan UMPP TPS 3000 537.691 1.28 3840 4377.691 Others 0 0.000 Tala, HPS 51 2.16 110 110.000 PTC GMR Kamalangs 1611 2676.266 1.33 2143 4819.266 TPS PTC Baglihar HPS J&K 264 3.72 981 981.000 Lanco Amarkantak TPS 1840 2387.629 2.1 3864 6251.629 PTC Karchamwangtoo 818 2181.342 1.8 1472 3653.342 HPS IGSTPP, Jhajjar (Aravali) 2406 7516.628 3.3 7940 15456.628 TPS Pragati Gas Bawana 0 992.302 0 0 992.302 CCGT Adani Power Ltd. TPS 9824 9770.170 2.2 21613 31383.170 Teesta III HPS 0 0 0 0.000 MGSTPS, CLP, Jhajjar 3441 8286.889 3.25 11183 19469.889 TPS Bhoruka HPS 29 3.18 93 93.000 P&R Gogripur HPS 10 3.98 39 39.000 Puri Oil Mill HPS 14 4.05 55 55.000 Biomass Projects 143 8.04 1150 1150.000 Cogeneration Plants 162 4.04 653 653.000 New Plants 0 0.000 Unchahar IV (NTPC) 0 0.000
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Source Estimated Annual Fixed Variable Charge Variable Charge Total Charge Quantum (MU) Charge (Rs millions) (Rs/kWh) (Rs. Million) (Rs. Mln) Naraingarh Sugar Mills 111 4.56 506 506.000 Kotli Bhel NHPC HPS 0 0 0.000 Parbati II HPS NHPC 0 0 0.000 Teesta III HPS 0 0 0.000 Kishangagnga NHPC 0 0 0.000 (J&K) Solar Projects 198.87 5.67 1128 1128.000 TOTAL 55259 67653.275 2.51 138895 206548.275
In accordance with the source wise volume and cost of power purchase approved by the Commission as indicated in the table above, the total volume of power available in the FY 2018-19 is approved at 55259 million units (kWh) (rounded off) at a fixed cost of Rs. cost of Rs.67653.275 millions and variable cost of Rs.138895 millions. Hence, the allowed total cost of power purchase in the FY 2018- 19 is pegged at Rs. 206548.275 millions. The average rate of power purchase (APPC), without transmission charges, for the FY 2018-19 works out to Rs. 3.74/kWh (rounded off).
It is reiterated that the Discoms should ensure that power is procured only from those sources for which the Commission has approved PPA’s. Additionally, any power from Central Generating Stations, beyond the quantum for which the PPA has been signed and specifically approved by the Commission must be surrendered in case the Discoms have to back down any approved long-term source of power. It is made clear that any power procured from sources not specifically approved by the Commission and/ or excess quantum vis-à-vis the approved PPA purchased by the Discoms shall be disallowed by the Commission.
In addition to the above and keeping in view the surplus power availability scenario obtaining in Haryana, the Commission directs that the Discoms shall not procure any additional power over and above the quantum approved in the PPA that may be available to it from the un-allocated share / share relinquished by any other State in the Central Generating Power Stations. The Commission thereto shall disallow all such power procurements and the cost thereto.
3.2.8 Transmission Losses
For calculating energy available for sale by the Distribution licensees, the petitioners have retained the transmission losses approved by the Commission for
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3.2.9 Interstate Transmission Charges
Interstate transmission charges proposed by UHBVNL and DHBVNL are Rs. 641.80 Crore and Rs. 843.74 Crore respectively i.e. a total of Rs 1485.54 Crore. The Commission has examined the proposal of the Discoms and finding it appropriate, approves the same. The approved amount, shown separately in the table that follows, shall form part of the combined power purchase cost of the Discoms for the FY 2018-19.
3.2.10 Inter-State sale of Power and Power purchase cost for Distribution licensees
UHBVNL and DHBVNL have indicated interstate sale of 3033.07 MUs and 4025.69 MU respectively for the FY 2018-19 and revenue from interstate sales has been considered at 80% of average variable power purchase cost and accordingly have projected revenue from interstate sale at Rs. 631.56 Crores and Rs. 836.96 Crores for UHBVNL & DHBNVL, respectively.
The Commission has considered the above and is of the considered view that any loss on account of interstate sale of power for FY 2018-19 ought not to be passed on to the electricity consumers of Haryana.
The Commission, in its earlier Orders, had directed the licensee to explore the possibility of the surrendering expensive long-term power that is in excess of its requirement. In case the licensee is unable to sell its contracted power at the rate of its energy cost, it is expected to back down the units to that extent so that the loss on account of power purchase is minimised. It has been observed that, at times, the Licensees are forced to back down its contracted long term power due to less demand whereas the licensees have been agreeing to the additional allocation done by the Ministry of Power out of the unallocated portion of the Central Generating Stations which is not at all justified. Any such allocation must be surrendered at the earliest and a compliance report be filed in the Commission within one month.
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However, the Commission observes that no such report has been filed by the licensee. The Commission reiterates its directions and expects the licensee to comply with all directions at the earliest.
Regarding trading loss on account of sale of surplus power it is worthwhile to note the observations of the Hon’ble Aptel’s Judgement dated 28th April, 2016 in Appeal No. 269 of 2014 is as under:-
“41.3) We are happy to note that the State Commission in a separate review order dated 14.07.2014, seeking review of an earlier tariff order dated 30.03.2013, has expressed its concern that the Discoms have already tied up with power which is in excess of requirement for at least 5 to 7 years without having a system of power procurement planning and for load optimum power cost and accordingly the State Commission has rejected the relief sought by the Discoms for recovering its trading loss from the consumers.”
As per Commission estimates, the availability of energy is considerably in excess of the estimated requirement during the FY 2018-19. In view of the above observation, the Discoms must gear up its power purchase procurement planning and strengthen its trading activities for disposal of surplus power. It would be appropriate for the licensee to closely monitor, on daily basis, the surplus capacity, which could neither be backed down nor sold off even at variable cost and is therefore leading to trading losses. The Discoms must fine tune its projection model and ensure that surplus energy available is disposed of in cost effective manner. Based on the projected sales, approved distribution losses, estimated interstate and intrastate transmission losses, the Commission estimates that 9857.66 MU of energy would be surplus during the FY 2018-19, which when sold at variable cost of Rs. 2.51/unit generates a revenue of Rs. 2474.27 Crores.
Energy available for Sale to the Distribution Licensees (FY 2018-19) Sr. No. Particulars Units UHBVNL DHBVNL Total 1 Gross energy procured from outside MUs 9280.47 12633.53 21914.00 the state sources 2 Interstate sale / banking ( Balancing MUs 4174.67 5682.99 9857.66 Figure) 3 Energy procured from outside the MUs 5105.80 6950.54 12056.34 state sources net of interstate sale / banking 4 Inter-state transmission losses % 3.82% 3.82% 3.82%
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Sr. No. Particulars Units UHBVNL DHBVNL Total 5 Inter-state transmission losses MUs 195.04 265.51 460.55 6 Net energy available from outside the MUs 4910.76 6685.03 11595.79 state 7 Add energy generated within the state MUs 14121.44 19223.56 33345.00 8 Net energy available for use in MUs 19032.19 25908.60 44940.79 Haryana/ Total energy at Haryana Boundary 9 Intra-state transmission losses % 2.46% 2.46% 2.46% 10 Intra-state transmission losses MUs 468.19 637.35 1105.54 11 Energy available for sale to MUs 18564.00 25271.24 43835.24 distribution licensee 12 Distribution loss % 20.00% 14.14% 16.64% 13 Distribution loss units MU 3712.80 3573.35 7286.15 14 Units available for sale by DISCOMS/ MU 14851.20 21697.89 36549.09 Discom approved sales 15 Total energy purchase MU 23401.90 31857.10 55259.00 16 Power purchase cost Rs. Mil 87472.13 119076.14 206548.27 17 Average rate Rs. 3.74 3.74 3.74
Calculation of Bulk Supply Rate for the DISCOMS for FY 2018-19 Particulars Units Fixed cost Rs. Million 67653.27 Total Variable cost of sold units of DISCOMS Rs. Million 113957.36 Total cost Rs. Million 181610.64 Transmission and SLDC Charges Rs. Million 32805.88 Total power purchase cost incl. Transmission & SLDC charges Rs. Million 214416.52 Units purchased for units sold by Discoms MU 45401.34 Average bulk supply rate Rs./Unit 4.72
3.2.11 Renewable Purchase Obligation (RPO)
Section 86 (1) (e) of the Electricity Act, 2003 mandates the Commission to promote cogeneration and generation of electricity from renewable sources of energy by providing suitable measures for connectivity with the grid and sale of electricity to any person, and also specify, a percentage of the total consumption of electricity in the area of distribution licensee, for mandatory purchase of electricity from such sources.
In accordance with the Regulation 64 of HERC (Terms and Conditions for determination of Tariff for Renewable Energy Sources, Renewable Purchase
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Obligation and Renewable energy Certificate) Regulations, 2010 the RPO for FY 2011-12 to FY 2017-18 as approved by the Commission were as under:-
Financial Energy %age of Renewable energy %age of Energy Total renewable year Consumpti Non (other than Solar) solar RPO required to be energy required on (MU) Solar required to be (as a %age purchased as to be purchased RPO purchased as per of overall per Solar RPO (MU) overall RPO (MU) RPO) (MU) 2011-12 36075 1.50% 541 0.31% 1.69 543 2012-13 40000 2.00% 800 0.05%* 20 820 2013-14 41086 2.90% 1191.49 0.10%* 41.09 1232.58 2014-15 45028 3.00% 1350.84 0.25%* 112.57 1463.41 2015-16 41202 2.75% 1133.05 0.75%* 309.01 1442.06 2016-17 46827 2.75% 1287.74 1.00%* 468.27 1756.01 2017-18 39209* 2.75% 1078.25 1.25% 490.11 1568.37
* Solar power purchase obligation is 0.05%, 0.1%, 0.25%, 0.75% & 1.00% of total energy consumption for the financial years 2012-13, 2013-14, 2014-15, 2015-16 & 2016-17, respectively. ** Energy available for sale by DISCOMs excluding energy purchased from RE sources and Hydro.
However, the Commission has replaced the existing Regulations with Haryana Electricity Regulatory Commission (Terms and Conditions for determination of Tariff from Renewable Energy Sources, Renewable Purchase Obligation and Renewable Energy Certificate) Regulations, 2017, notified on 24.07.2018. Regulation 54 of ibid Regulations, has revised the RPO obligation for the FY 2017- 18 as under:-
FY Existing Total RPO (%) of Revised Minimum RPO (%) of Total Consumption Consumption Excluding Hydro Total RPO Solar Non Solar Solar 2017-18 4.00 1.25 2.75 2.50
Accordingly, the revised RPO obligation for the FY 2017-18, in accordance with the provisions of the amended Regulations, the RPO for the FY 2017-18 is as under:-
Energy Consumption %age of Non solar Non solar Solar RPO Solar RPO Total renewable for 2017-18 (MU) RPO of energy RPO (MU) as %age of (MU) energy required to Consumption energy be purchased sales (MU)
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39209.18* 2.75% 1078.25 2.50% 980.23 2058.48
As per data provided by the State Nodal Agency vide memo 775 dated 18.05.2018, the shortfall in meeting the RPO for the aforesaid years has been worked out as under:- (In Mus)
Type of RE source RPO backlog till FY 2016-17 Shortfall FY 2017-18 Total Shortfall Solar 377 271 648 Non-Solar 405 582 987 Total 782 853 1635
The Commission observes that the shortfall in meeting the RPO obligations of the DISCOMs is not reducing. DISCOMs are advised to ensure that the Solar RPO data provided by them to HAREDA includes energy generated by Rooftop solar Power also. Accordingly, the Commission in its Order dated 22.03.2018 in case nos. HERC/PRO-26 of 2015 & HERC/PRO-28 of 2015 after examining the compliance report filed by the Nodal Agency (HAREDA) and observed that “there have been instances when the mandated reports have not been filed with the Commission in compliance of the RPO regulations. The Commission directed HAREDA and the obligated entities to strictly comply with the RPO through purchase of RE power and / or REC in case of power surplus scenario and also the filing requirements. Further, HAREDA was also directed to ensure that its website is kept upto-date with the information filed by the obligated entities. The Commission further directed that HPPC and other obligated entities shall assess the shortfall in meeting RPO for the FY 2016-17 and take suitable action to meet at least 50% of the shortfall so determined by purchase of REC’s. DISCOMs are directed to file the compliance report of the same within 45 days from the date of issue of this Order.”
In accordance with the provisions of the amended regulations, the RPO for the FY 2018-19 is 7% of the total energy consumption of the Discoms. The approved RPO for the FY 2018-19 is as under:-
Energy Consumption %age of Non solar Non solar Solar RPO Solar RPO Total renewable for 2018-19 (MU) RPO of energy RPO (MU) as %age of (MU) energy required to Consumption energy be purchased sales (MU) 38231.92* 3.00% 1146.96 4.00% 1529.28 2676.23
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* Energy available for sale by DISCOMs excluding energy purchased from RE sources and Hydro.
The volume of energy to be purchased from renewable energy sources as per above table is the total RPO of the Discoms for the financial year 2018-19. Therefore, the volume of renewable energy purchase as approved by the Commission as above shall be adjusted against the total RPO of the Discoms. Further, RPO backlog up to 31st March 2018 shall be part of total power purchase volume approved by the Commission for the FY 2018-19 and set off against the costliest power in the merit order.
The Commission has noted from the submissions of HPPC during the public hearing that they have made some progress regarding meeting the RPO targets set by the Commission, hence the shortfall as indicated above, especially for non-solar RPO, has reduced. The Commission directs the Discoms to purchase renewable energy or RECs to meet with the RPO targets set for the FY 2018-19 and also to make up for the shortfall of RPO compliance carried forward for the previous years, on actual basis. In view of Haryana Government’s mandate to promote RE energy especially roof top solar and Waste to Energy, Discoms are directed to meet the maximum RPO targets from these sources.
The State government is promoting generation of solar power in the state through various initiatives. However, it is observed that the Discoms and HAREDA are unable to realise the potential of solar generation in the State in the absence of proper infrastructure. The Discoms are directed to submit an action taken report in furtherance of the latest solar policy issued by the State Government within three month of this order.
The State Nodal Agency i.e. HAREDA shall continue submitting quarterly status of RPO met by the obligated entities for the last quarter, separately for overall RPO and solar RPO, in accordance with the provisions of regulations 56 (3) of the Haryana Electricity Regulatory Commission (Terms and Conditions for determination of Tariff from Renewable Energy Sources, Renewable Purchase Obligation and Renewable Energy Certificate) Regulations, 2017 in the format given below:-
Total no. of units generated/Purchased through Open Access (MTOA,LTOA) 1 MUs - Total No. of units utilized for captive consumption 2 -
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Total 3=1+2 - RPO Required (Solar %) 4 - RPO Required (Non Solar %) 5 - RPO Required (Solar - Units) 6 = 3*4/100 - RPO Required (Non Solar - Units) 7 = 3*5/100 - No. of units generated/purchased from solar renewable energy sources 8 - No. of units generated/purchased from Non-solar renewable energy sources 9 - Balance Units (Solar) 10= 6-8 - Balance Units (Non Solar) 11=7-9 - No. of RE unit purchased (Solar) 12 - No. of RE unit purchased (Non-Solar) 13 - No. of REC purchased (Solar) 14 - No. of REC purchased (Non-Solar) 15 - Shortfall (Solar) Units 16=10-12-14 - Shortfall (Non Solar) Units 17=11-13-15 -
Note: Details of Solar RPO and Other RPO and compliance to be reported separately.
The State Agency may suggest appropriate action to the Commission for non- compliance of the renewable purchase obligation by the obligated entities.
The Discoms and other obligated entities are directed to provide requisite information to the State Agency on monthly basis by 10th of every month for the previous month to enable the State Agency to submit quarterly report to the Commission.
3.2.12 Intrastate Transmission Charges & SLDC Charges
The Commission, vide its Order dated 31.10.2018 on HVPNL’s Transmission Tariff and SLDC charges petition for the FY 2018-19, has approved Transmission tariff and SLDC charges for the FY 2018-19 to be recovered by HVPNL from UHBVNL and DHBVNL. The intrastate transmission charges approved include the unitary charge arising out of transmission project commissioned through Public Private Partnership (PPP) between HVPNL and M/s Jhajjar KT Transco Private Limited. The details including monthly recovery of the transmission and SLDC charges from various beneficiates including the Discoms are given in the ibid order. Hence, the same is not being reproduced here. The transmission and SLDC Charges, as determined by the Commission in the ibid Order, shall form part of the ARR of the Discoms for the FY 2018-19.
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3.2.13 Employee Cost / A&G Expenses
The Employee cost, A&G expense and Repair & Maintenance expenses together comprise the O&M expenses of the Distribution Licensee. The O&M expenses as per the MYT Regulations, 2012 are considered as controllable costs except for Terminal Benefits (TBs) which are considered uncontrollable. The O&M expenses as per these Regulations are to be worked out for the Distribution and Retail Supply Business for each year of the control period as under:-
“The actual audited O & M expenses for the financial year preceding the base year, subject to prudence check, shall be escalated at the escalation factor of 4% to arrive at the O & M expenses for the base year of the control period. The O&M expenses for the nth year of the control period shall be approved based on the formula given below.
O&Mn = (R&Mn + EMPn + A&Gn)* (1-Xn) + Terminal Liabilities Where, R&Mn – Repair and Maintenance Costs of the Distribution Licensee(s) for the nth year;
EMPn – Employee Costs of the Distribution Licensee(s) for the nth year excluding terminal liabilities;
A&Gn – Administrative and General Costs of the Distribution Licensee(s) for the nth year; The above components shall be computed in the following manner. (a) R&Mn = K * GFA * INDXn / INDXn-1 Where, ‘K’ is a constant (expressed in %) governing the relationship between O&M costs and Gross Fixed Assets (GFA) for the nth year. The value of K will be 1.65% for DHBVN and UHBVN respectively for the entire control period; ‘GFA’ is the average value of the gross fixed asset of the nth year. ‘INDXn’ means the inflation factor for the nth year as defined herein after.
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(b) EMPn (excluding terminal liabilities) + A&Gn = (EMPn-1 + A&Gn- 1)*(INDXn/ INDXn-1) Where, INDXn – Inflation Factor to be used for indexing the Employee Cost and A&G cost. This will be a combination of the Consumer Price Index (CPI) and the Wholesale Price Index (WPI) for immediately preceding year and shall be calculated as under:
INDXn = 0.55*CPIn +0.45*WPIn.”
It has further been provided in these Regulations vide Note 1 appended below Regulation 57.3 that “For the purpose of estimation, the same INDXn value shall be used or all years of the control period. However, the Commission shall consider the actual values of the INDXn at the end of each year during the annual performance review exercise and True-up the employee cost and A&G expenses on account of this variation.”
In the MYT Order dated 29.05.2014 for Distribution Retail Supply Business for FY 2014-15, the Employee Cost (excluding TBs) and A&G expenses for FY 2014-15, FY 2016-17 and FY 2016-17 were worked out based on audited expenses under these heads for FY 2012-13 using an indexation factor (INDX) of 9.21%. The projected employee cost and A&G expenses as proposed by UHBVNL and DHBVNL for the FY 2018-19 are based on audited cost for the FY2016-17 and escalated by indexation factor of 1.80% per annum. The annual increment of 3% as normal increment and 12% as increment due to 7th Pay Commission has been considered by the DISCOMS in the revised basis salary calculated as per 7th pay commission i.e. summation of the Basic and DA salary as per the Annual audited accounts of FY 2016-17. Further, other allowance have also been increased by 3% to arrive at employee cost for FY 2017-18 & FY 2018-19. Also, Rs 100 Cr and Rs. 90 crores have been added as onetime expense towards payments for arrears of 7th Pay Commission by UHBVNL and DHBVNL respectively.
The Commission has examined the calculation of proposed employee cost for the FY 2018-19 by the Licensees and finds it appropriate. However, any variation in the employees cost because of either the inflation or on account of the impact of implementation of the 7th Pay Commission recommendations shall be allowed to
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3.2.14 A & G Expenses
The A&G expenses for FY 2017-18 have also been worked out based on the inflation indexation factor of 1.80% per annum on the same lines as Employee Cost by the DISCOMS. The Commission has examined the calculations and finding them appropriate, approves the same as proposed. Accordingly, the Commission approves A&G expenses at Rs. 99.91 crores and RS. 85.18 crores for UHBVNL and DHBVNL for the FY 2018-19 as proposed.
3.2.15 Repair & Maintenance
UHBVNL and DHBVNL have proposed R&M expenses of Rs. 131.56 Crore and Rs. 151.06 Crores respectively for the FY 2018-19 @ 1.65% of average GFA for the FY 2018-19 based on the estimated capital expenditure for FY 2017-18 and the FY 2018-19 in accordance with the MYT Regulations.
The Commission has restricted the proposed capital expenditure for the FY 2017-18 and FY 2018-19 for DHBVNL in view of the reasons recorded in the present Order at relevant paragraph. The resultant calculations of R&M expenses are also on the lower side. The R&M expenses for UHBVNL is approved as proposed i.e. Rs. 131.56 Crores.
The approved R&M expenses for the FY 2018-19 are as given below:
Particulars DHBVNL UHBVNL Opening GFA as approved by the Commission 8410.25 Closing GFA as approved by the Commission 9649.22 Average GFA for the FY 2017-18 9029.74 R&M expenses @ 1.65% of average GFA 148.99 131.56
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3.2.16 Terminal Benefits
The Commission approves the expenditure towards terminal benefits for the FY 2018-19 as proposed by UHBVNL and DHBVNL respectively at Rs. 300 Crore and Rs. 343.25 Crores, as the proposed expenditure is considered reasonable.
3.2.17 O & M Expenses
Based on the above calculation, the O & M expenses approved by the Commission for FY 2018-19 are Rs. 1334.49 crore as proposed by UHBVNL and Rs. 1397.45 Crore as against Rs. 1399.52 crore proposed by DHBVNL, being in accordance with the methodology as prescribed by the MYT regulations. The minor difference between the proposed and approved figures for DHBVNL is due to the difference in average GFA for the FY 2018-19 used for calculation of R&M expenses. However, the Commission directs the licensee ensure that the actual O&M expenses for the FY 2018-19 are within the O&M expenses approved by the Commission. The details of O&M expenses of UHBVNL and DHBVNL are provided in the tables that follow.
O & M expenses of UHBVNL for the FY 2018-19 (Rs. Crore)
Audited expensed For Particulars UHBVNL filing HERC order the FY 2016-17 Employee Expense 647.39 803.02 803.02 A&G Expense 96.40 99.91 99.91 R&M Expense 62.42 131.56 131.56 Terminal Liability 421.06 300.00 300.00 Total 1227.28 1334.49 1334.49
O & M expenses of DHBVNL for the FY 2018-19 (Rs. Crore) Audited expensed For Particulars DHBVNL filing HERC order the FY 2016-17 Employee Expense 669.34 820.03 820.03 A&G Expense 82.18 85.18 85.18 R&M Expense 68.23 151.06 148.99 Terminal Liability 420.00 343.25 343.25 Total 1239.75 1399.52 1397.45
3.2.18 Depreciation
UHBVNL has proposed depreciation of Rs. 342.28 crore in their ARR petition for FY 2018-19 based on opening balance of GFA as on 01.04.2017 and its projections of capital expenditure for FY 2017-18 and FY 2018-19.
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The Commission, as previously noted, has restricted the Capital expenditure for UHBVNL for the FY 2017-18 and FY 2018-19 in view of the reasons recorded at the relevant paragraphs of this order. Based on the audited average rate of depreciation of 4.60% and the approved capital expenditure for FY 2017-18 and FY 2018-19, the depreciation for FY 2018-19 for UHBVNL is approved at Rs. 345.41 crore. The Depreciation on assets funded through consumer contribution Rs. 40.12 crore is reduced from the above amount to arrive at net approved depreciation of Rs. 305.29 crore for FY 2018-19.
Depreciation of UHBVNL for FY 2018-19 (Rs. in crore) Particulars FY 2018-19 Gross Fixed Assets (GFA) HERC approval Opening GFA 7505.66 Opening GFA funded through consumer 871.73 contribution/ grants Depreciation Rate 4.60% Depreciation amount 345.41 Less depreciation on assets funded 40.12 through consumer contribution Net depreciation for the year 305.29
Similarly, DHBVNL has proposed depreciation of Rs. 364.59 crore in their ARR petition for the FY 2018-19 based on opening balance of GFA as on 01.04.2017 and its projections of capital expenditure for FY 2017-18 and FY 2018- 19. Based on the audited average rate of depreciation of 4.54% for FY 2017-18 and the approved capital expenditure for FY 2017-18 and FY 2018-19, the Commission approves Rs. 382.19 crore as depreciation for FY 2018-19 for DHBVNL. The Depreciation on assets funded through consumer contribution Rs. 94.10 Crore is reduced from the above amount to arrive at net approved depreciation of Rs. 288.09 crore for the FY 2018-19 as given in table below:-
Depreciation of DHBVNL for the FY 2018-19 (Rs. Crore) Particulars FY 2018-19 Gross Fixed Assets (GFA) HERC approval Opening GFA 8410.25 Opening Assets funded through consumer 2070.72 contribution/ grants Depreciation Rate 4.54% Depreciation amount 382.19 Less depreciation on assets funded through 94.10 consumer contribution Net depreciation for the year 288.09
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3.2.19 Interest on Term Loan
The UHBVNL and DHBVNL have proposed to recover Rs. 129.92 crore and Rs. 184.73 crore as interest on term loan for the FY 2018-19. The Commission has examined the calculation of term loan interest proposed by the Licensees and finding them reasonable, approves the same.
3.2.20 Interest on Consumers’ Security Deposit
The Commission, in its earlier Orders has directed the licensees to ensure that the interest on consumer security deposit is duly paid on time. The Consumer security deposit is a source of cheap working capital finance for the licensee and adequate security ensures consumer compliance in timely payment of bills. Therefore, it is imperative that the interest due on these deposits, if not paid on time, does not become a source of dissatisfaction for the consumers. The Commission observes that from the details of interest on consumer security deposit for the FY 2016-17 provided by DHBVNL, it appears that interest may not have been paid to all consumers by the licensee, which is a contravention of the directions of the Commission and may invite penal action. The licensee is directed to ensure that interest on consumer security deposit is paid strictly on time and in accordance with the regulations and directions of the Commission. Therefore, in order to ensure compliance of the Act and the regulations, the Commission approves Rs. 85.24 crores for UHBVNL and Rs. 76.87 crores for DHBVNL as interest on consumer security deposit for the FY 2018-19, as proposed by them.
3.2.21 Interest on Working Capital
Working capital borrowings have been calculated in accordance with the methodology prescribed in the MYT regulations. However, the rate of interest has been taken at 9.50% based on the base rate of State Bank of India (SBI) as on 01.04.2018 i.e. 8.70% and a margin of 0.80% on the same. The Commission, in accordance with the MYT Regulations, approves the interest on working capital borrowings for the FY 2018-19 as under:-
Approved Interest on Working Capital Loan of UHBVNL (Rs. in Crore) Interest on working capital FY 2018-19 O&M expenses for 1 month 111.21 Maintenance spares 1% of opening GFA 75.06
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Interest on working capital FY 2018-19 2 months receivables 2027.75 Uncollected revenue 121.67 Total 2335.68 Less: ACD 1311.43 Net working capital 1024.25 Interest Rate 9.50% Interest cost (rounded off) 97.30
Approved Interest on Working Capital Loan of DHBVNL (Rs. Crore) Interest on working capital FY 2018-19 O&M expenses for 1 month 116.45 Maintenance spares 1% of opening GFA 84.10 2 months receivables 2632.37 Uncollected revenue 157.94 Total 2990.86 Less: ACD 1182.61 Net working capital 1808.25 Interest rate 9.50% Interest cost 171.78
3.2.22 Interest on UDAY Bonds
The discoms have, in their petition stated that as per the financial arrangement under UDAY scheme, 75% of the borrowings as on 30.9.2015 were to be taken over by the State Government within 5 years by conversion into equity and grant. Until such time the arrangement is completed, the interest is to be borne by the Distribution licensees.
The Discoms have proposed to recover all their interest costs from the consumers by way of interest on borrowings for capital expenditure and the balance through interest on working capital borrowings inclusive of UDAY bonds. However, the Commission observes that the interest cost borne by the licensee is recovered from the consumers of the state by way of interest on borrowings for capital expenditure, interest on working capital borrowings; interest on Advanced Consumption Deposit and also some interest is recovered as part of FSA. The interest being recovered as part of FSA has not been accounted for by the licensees while calculating the financial burden of interest as part of the UDAY scheme.
Interest on UDAY borrowings for the FY 2018-19
As per the information provided by the Discoms the interest payable for UDAY bonds for the FY 2018-19 is as under:-
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Rs. Crore Interest to State Govtt. for UDAY Bonds UHBVNL DHBVNL Total 377.02 239.76 616.78
The total cost for the FY 2018-19 adds up to Rs. 616.78 Crore. The same shall be met out of OFR available under the UDAY.
3.2.23 Total Expenditure
As per the item wise expenditure approved by the Commission the total expenditure works out to Rs.12363.77 Crore (UHBVNL) and Rs. 16041.67 Crore for (DHBVNL) for the FY 2018-19 as against Rs. 14168.82 Crore proposed by UHBVNL and Rs. 17037.12 Crore proposed by the DHBVNL respectively.
The Commission, in view of the UDAY, is of the considered view that in the present Order distribution loss trajectory has been pegged at par that agreed upon in the said scheme as well as not allowed any additional working capital loan and interest thereto on account UDAY. Further, fresh Equity is expected to be infused in the Discoms under UDAY. Hence, in order ensure financial turnaround of the Discoms in line with the objectives of UDAY, the Commission has considered it appropriate to allow 10% RoE in the FY 2018-19 i.e at the same rate as allowed to HPGCL and HVPNL. Consequently, RoE amounting to Rs. 394.84 Crore (Rs. 196.61 Crore for UH & Rs. 198.23 Crore for DH) for both the Discoms shall be recovered along with the revenue gap in the FY 2018-19.
3.2.24 Non-Tariff Income
Non-tariff income is approved as proposed by the discoms at Rs. 197.25 Crore for UHBVNL and Rs. 247.47 Crore for DHBVNL respectively.
3.2.26 ARR of UHBVNL & DHBVNL for the FY 2018-19
In view of the above, the total ARR stands approved at Rs. 12166.52 Crore for UHBVNL as against Rs. 13971.57 Crore proposed by UHBVNL and Rs. 15794.20 crores for DHBVNL as against Rs. 16789.65 Crore proposed by it.
ARR of UHBVNL for the FY 2018-19 (Rs. in Crore) UHBVNL HERC Sr. No. Particulars Proposal Approval 1 Power Purchase Expenses 10643.03 10214.91
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UHBVNL HERC Sr. No. Particulars Proposal Approval 1.1 Power purchase cost 9193.30 8747.21 Interstate transmission charges 641.80 641.80
1.2 Intrastate transmission charges & SLDC Charges 807.93 824.39 1.3 SLDC charges 1.51
2 Operations and Maintenance Expenses 1334.49 1334.49 2.1 Employee Expense 803.02 803.05 2.2 A&G Expense 99.91 99.91 2.3 R&M Expense 131.56 131.56 2.4 Terminal Liability 300.00 300.00 3 Depreciation 342.28 305.29 4 Interest Cost
4.1 Interest on Consumer Security Deposit 85.24 85.24 4.2 Interest & Finance Charges ( term loan) 151.62 129.92 4.3 Interest & Finance Charges ( Working capital) 109.46 97.30 4.4 Interest on UDAY Bonds 377.02
5 Return on Equity Capital 683.35 196.61 6 Other Expenses 37.53 - 7 Interest cost over and above normative 404.80 - A Total Expenditure 14168.83 12363.77 B Income/Receipts
8 Non Tariff Income 197.25 197.25 C Aggregate Revenue Requirement = (A - B) 13971.58 12166.52
ARR of DHBVNL for the FY 2018-19 (Rs. Crore) Sr. DHBVNL HERC Particulars No. Proposal Approval 1 Power Purchase Expenses 13803.21 13720.50 1.1 Power purchase cost 12025.08 11907.61 1.2 Interstate transmission charges 843.74 843.74 1.3 Intrastate transmission charges & SLDC Charges 934.38 967.38 SLDC charges 1.77
2 Operations and Maintenance Expenses 1399.52 1397.45 2.1 Employee Expense 820.03 820.03 2.2 A&G Expense 85.18 85.18 2.3 R&M Expense 151.06 148.99 2.4 Terminal Liability 343.25 343.25 3 Depreciation 364.59 288.09 4.1 Interest on Security Deposit 76.87 76.87 4.2 Interest & Finance Charges ( term loan) 184.73 184.73 4.3 Interest & Finance Charges ( Working capital) 179.99 171.78 4.4 Interest on UDAY Bonds 239.76 0 4.5 Cost of raising finance 4.01 4.01 5 Return on Equity Capital 511.13 198.23 6 Other Debits 57.76 0 7 Interest cost over and above normative 215.56 - A Total Expenditure 17037.12 16041.67 B Income/Receipts
8 Non Tariff Income 247.47 247.47 9 Income from FSA
C Aggregate Revenue Requirement = (A - B) 16789.65 15794.20
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3.2.27 Revenue Requirement for the FY 2018-19
The total ARR of the two Discoms for the FY 2018-19 is as given in the table above. The revenue surplus/ gap for the FY 2018-19 is as per the table below:-
ARR for FY 2018-19 at Current Tariff (Rs. Crores)
Revenue gap at Total ARR for FY 2018-19 current tariff UHBVNL 12166.52 DHBVNL 15794.20 Total ARR for FY 2018-19 27960.72 Revenue at current tariff (calculated at calculated at projected consumer category wise sales and consumer category wise average connected load / contract demand for FY 2018-19) 18653.12 Revenue from Interstate Sale (Rs. Crore) 2474.27 Total Sales for FY 2018-19 (MU) 36549.09 COS at LT level ( not considering the impact of UDAY bonds) 7.58 AP Sales for the FY 2018-19 (MU) 9575 Subsidy for AP supply at LT COS (less revenue from AP tariff) 7139.72 Total revenue including RE Subsidy 28267.11 Revenue Surplus /(Gap) for FY 2018-19 at current tariff 306.39 3.3 Capital Expenditure
3.3.1 True-up of Capital Expenditure for the FY 2016-17 a) UHBVNL
The Petitioner in its petition for true-up of FY 2016-17, APR of FY 2017-18 and ARR for FY 2018-19 submitted that The Hon’ble Commission had approved a Capital Expenditure of Rs. 1055.97 Cr for UHBVN for FY 2016-17. As per the audited accounts of UHBVN for FY 2016-17; the Capital Expenditure for UHBVN for FY 2016-17 is Rs. 371.71 Cr. UHBVN, thus requests the Hon’ble Commission to approve the same.
The Commission observes that vide its Order on ARR for FY 2017-18 and Annual Performance Review for the FY 2016-17 on the request of the petitioner, had approved a revised capital expenditure of Rs. 316.47 Crore against its approved Capital expenditure of Rs. 1055. 97 Crore for FY 2016-17. However, the licensee in their filing of Annual Performance Review petition for the FY 2017-18 (including truing up for FY 2016-17) as per MYT Regulations has intimated that the actual expenditure incurred during FY 2016-17 is Rs. 371.71 Crore and has prayed the Commission to approve the same. UHBVNL had not provided the complete details of the same, hence, the Commission directed the licensee to submit the work wise details of actual capital expenditure incurred by them vide Memo No. 925-926/HERC/D.Tech dated 24.06.2018. Accordingly the licensee submitted work wise details vide his letter no. Ch-17/SE/RA/H/F-25/Vol (70) dated 18.07.2018. A perusal of the
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same revealed that the actual capital expenditure incurred during FY 2016-17 is Rs. 371.71 Crore. The details of the Capex approved by the Commission
Progress of works executed in respect of Capital Expenditure Plan for FY 2016-17 (UHBVN) (Rs. in Cr.) Approval Progress of granted by works Reason for Sr. HERC in ARR executed over/ under Name of scheme / work No. order for FY during FY expenditure 2016-17 2016-17 Financial Financial 1 Creation of new 33 kV sub-stations (Nos.) 60.00 2 Augmentation of existing 33 kV sub-stations (Nos.) 56.55 3 Erection of new 33 kV lines (km) 24.00 4 Augmentation of existing 33 kV lines (km) 26.45 5 Erection of new 11 kV lines (km) 14.00 99.34 6 Bifurcation/Trifurcation of overloaded 11 kV feeders 20.00 7 R-APDRP (Part-A) 26.00 20.25 8 R-APDRP (Part-B) 0.00 0.00 Maintenance free earthing using 'Ground Enhancing 9 Material' for Distribution Transformers, Meter Pillar Boxes 0.00 0.00 and H-pole etc. 10 AMR of DS and NDS consumers between 20 KW to 50 KW 10.00 0.00 11 Shifting of Meters in Pillar Boxes 30.00 0.00 12 Pilot Project (Smart Grid in Panipat) 3.00 0.19 13 R-APDRP in Non APDRP Area 10.00 0.00 Setting up of a new testing lab for materials, i.e. cable, 14 2.07 0.00 conductors, transformer oil, distribution transformers, etc. Revamping of existing M&T (Meter Testing) labs at 15 10.71 0.14 (Kaithal, Yamunanagar, Karnal, Dhulkote & Rohtak) 16 Construction of UHBVNL Office Building at Panchkula 15.00 0.00 17 Civil Works 15.00 12.92 Annual maintenance Contract of Automatic Power Factor 18 0.00 0.00 Correctors Shifting of 33 kV dangerous Lines (CM Announcement) 19 13.76 0.58 (km) / Sites Shifting of 11 kV dangerous Lines (CM Announcement) 20 46.28 0.00 (km) / Sites Site testing of DS, NDS consumers upto 20 KW in urban 21 14.30 0.00 area Works to be carried out under DDUGJY scheme for system 22 strengthening 80.00 0.00
Works to be carried out under IPDS scheme for system 23 40.00 0.00 strengthening Compulsory metering on Feeders, DTs, Boundary Meters 24 16.50 0.00 for Villages in Rural Areas Engagement of IT firm for Roll out of R-APDRP Application 25 7.50 0.00 to Non R-APDRP Areas 26 Consumer indexing and GIS mapping of losses 10.00 4.48 27 Release of tube well connections 20.00 Relocation of energy meters of DS & NDS consumers 233.81 28 4.00 outside their premises. Material required for release of non-AP connections, 29 200.00 replacement of old assets and system improvement Budget Procurement of single phase meters for replacement of 30 defective meters and release of new connections (Only 58.04 smart meters to be procured) Procurement of three phase meters for replacement of 31 defective meters and release of new connections (Only 29.23 smart meters to be procured) Procurement of power T/F and allied equipments such as 33 kV CTS (current transformers), 33 kV PTs (potential 32 18.58 transformers), 33 kV and 11 kV VCBs (Vacuum Circuit Breakers), 33 kV Control and Relay Panels etc. 33 Procurement of LT AB Cables for loss reduction plan 80.00
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Approval Progress of granted by works Reason for Sr. HERC in ARR executed over/ under Name of scheme / work No. order for FY during FY expenditure 2016-17 2016-17 Financial Financial 34 Procurement of LT AB Cables for loss reduction plan 40.00 Re conductoring / augmentation of 11kV lines with 100 35 mm2 in urban areas and 80/50 mm2 in rural areas in kms 30.00 (in addition to quantity covered in Sr. No. 7) Re conductoring / augmentation of LT lines with 100 mm2 36 in urban areas and 80/50 mm2 in rural areas in kms (in 25.00 addition to quantity covered in Sr. No. 7) Grand - Total 1055.97 371.71
Regulation 9.9 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 specifies as under:-
“In case the capital expenditure is required due to Force Majeure events for works which have not been approved in the capital investment plan or for works that may have to be taken up to implement new schemes approved by the State/Central Govt., the generating company or the licensee shall submit an application containing all relevant information along with reasons justifying emergency nature of the proposed work seeking approval by the Commission. In the case of works or schemes, other than those required on account of Force Majeure events, the Commission shall consider to give approval only in those cases where the works/schemes are wholly/substantially financed by the State/Central Government or, in view of the Commission, shall benefit a large mass of consumers of the State. The generating company or the licensee may take up the work prior to the approval of the Commission only in case the delay in approval will cause undue loss and such emergency nature of the scheme has been certified by the Board of the Directors and intimated to the Commission”.
Further, as per Regulation 8.3 (b) of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012, capital expenditure is a controllable item. As such the licensee should have exercised proper control over the item wise capital expenditure approved by the Commission.
Regulation 9.10 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 further specifies as under:-
“In case the capital expenditure incurred for approved schemes exceeds the amount as approved in the capital expenditure plan, the generating company or the transmission or the distribution licensee, as the case may be, shall file an application
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with the Commission at the end of control period for truing up the expenditure incurred over and above the approved amount. After prudence check, the Commission shall pass an appropriate order on case to case basis. The True-up application shall contain all the requisite information and supporting documents”.
Provided that any additional capital expenditure incurred on account of time over run and / or on unapproved schemes not covered under Regulation 9.9 or unapproved changes in scope of approved schemes shall not be allowed by the Commission unless the generating company or the licensee, as the case may be, is able to give adequate justification for the same”.
It has been observed that the licensee has not been able to start 14 works during the year for which an amount of Rs. 271.65 Crore was approved. Further, in respect of the works mentioned at Sr. No. 28 to 36 , the expenditure has been shown as Rs. 233.81 Crore against the approval of Rs. 505 Crore as per the approved plan, which is 46% of the target but the work-wise financial progress has not been given
The licensee has not given any reasons/justification for only 35% expenditure of the approved Capex for FY 2016-17. It is a matter of concern that the licensee has not been able to utilize the capital expenditure even when the focus is primarily on system strengthening and loss reduction under UDAY scheme. Such scenario defeat the very purpose of expenditure approved and objective of providing reliable and quality power to the consumers is not achieved. There seems to be lack of proper planning and execution of the Capital works on the part of the licensee. The licensee needs to exercise proper monitoring of execution of capital works and control over the item wise expenditure approved by the Commission. b) DHBVNL
The Petition has submitted through their Annual Performance Review Petition that the actual expenditure for FY 2016-17 would be to the tune of Rs. 825 Crore against Rs. 1200 Crore approved by the Commission. However, the licensee during the hearing on 22.03.2017 intimated that the expected expenditure would be Rs. 637.94 Crore . The Commission thus allowed revision of Capital Expenditure for FY 2016-17 to Rs. 637.94 Crore for DHBVNL. The licensee has provided the detail of the actual expenditure.
Capital Expenditure for FY 2016-17. Annexure-I (Rs. In Crores) Sr. Proposed CAPEX Actual CAPEX Categories No. (Rs. In Cr) (Rs. In Cr) AT&C loss reduction plan Procurement of single phase meters for replacement of defective meters & 1 35.00 41.32 release of new connections and procurement of Smart Meters. Procurement of three phase meters for replacement of defective meters & 2 6.00 3.41 release of new connections and procurement of Smart Meters..
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Capital Expenditure for FY 2016-17. Annexure-I (Rs. In Crores) Sr. Proposed CAPEX Actual CAPEX Categories No. (Rs. In Cr) (Rs. In Cr) 3 LT Connectivity of already executed HVDS works 1.54 6.52 4 Power Factor Improvement (Providing automatic power factor correctors) 3.69 0.36 Load Growth schemes 5 Creation of new 33 kV sub-stations 6 Augmentation of existing 33 kV sub-stations 164.00 170.18 7 Erection of new 33 kV lines 8 Augmentation of existing 33 kV lines Bifurcation of 11 kV feeders (Work of bifurcation of feeders, augmentation of 9 23.83 27.34 ACSR) Material required for release of Non-AP connections & replacement of old 10 150.67 153.46 assets 11 Release of Tube well connection on turnkey basis 100.73 97.89 Procurement of power transformers and allied equipment such as 33 kV 12 CTs, 33 kV PTs, 33 kV and 11 kV VCBs, 33 kV Control and Relay Panels 18.00 17.44 etc. 13 Release of BPL connections under RGGVY schemes. 1.00 1.19 R-APDRP schemes 14 Implementation of R-APDRP (Part-A) 10.19 7.85 15 Implementation of R-APDRP (Part-B) 0.00 Relocation of Energy Meters of DS & NDS consumers outside their premises 16 12.52 24.65 in Meter Pillar boxes 17 Civil Works 4.00 4.97 System Strengthening Works under IBRD loan and IBRD equity 18 Under IBRD Loan 52.14 35.93 19 Under IBRD Equity 12.86 8.18 Other Works Revamping of existing Meter testing labs, at Dadri, Sirsa, Hisar, Faridabad & 20 0.00 0.46 Gurgaon Maintenance free earthling using 'Ground Enhancing Material' for Distribution 21 0.22 1.37 Transformers, Meter Pillar Boxes and H-pole etc. 22 Installation of meters on 33 kV Incomers at sub-stations for energy auditing. 0.00 0.00 AMI on large NDS & LT consumers having load about 10 kW (IBRD funded 23 0.00 0.00 work Total 596.39 602.52 Setting up of a new testing lab for materials i.e. cable, conductors, 24 0.00 0.00 transformer oil, distribution transformers etc. at Hisar Strengthening of 11 kV & LT Network of Bhiwani & Jind Towns (Total project 25 0.00 0.00 Cost Rs. 75 Crore. To be funded form world bank Shifting of 33 kV lines passing over authorized/un-authorized colonies (CM 26 2.00 0.00 Haryana announcement) Works under Ujjwal Discom Assurance Yojana 27 Providing of metering arrangements on feeders (4535 numbers). 0.00 0.00 Providing of AMR meters on DTs in left out urban areas (Approx. 5009 DTs) 28 0.00 0.00 i.e areas not covered RAPDRP Part-A scheme. 29 Providing of boundary meters for Villages (7296 meters in 3648 villages). 0.02 0.02 Providing of meters on DTs in rural areas (to be provided for reduction of 30 0.00 AT&C losses to 30%. Engagement of IT firm for Roll out of R-APDRP Application to Non R-APDRP 31 Areas. (Procurement and installation of IT hardware at end locations of Sub- 0.00 0.00 Divisions, Providing MPLS connectivity at end location). 32 Consumer indexing and GIS mapping of losses 0.00 0.00 33 Replacement of bare conductor with LT-AB cable in theft prone areas 30.07 29.06 Replacement of defective meters and Relocation of energy meters of DS&NDS consumers outside their premises in MCBs (Procurement of 1X1 & 34 8.41 8.30 4X1 MCBs for 1 Ph Meters, 1X1 MCBs for 3 Ph Meters, 2cx10 mm2 and 4cx16 mm2 LT PVC armoured/un-armoured cables and meters). Other works for system improvement – procurement of IT equipment and 35 1.05 1.03 software Total 637.94 640.93
The Commission observed that the DHBVNL could achieve the capax progress during FY 2016-17 to the tune of 53.41% of its approved Capital Expenditure in its ARR Order for FY 2016-17. And during Annual performance review of FY 2016-17 it came out with the fact that the likely expenditure on its capital work would be Rs. 637.91 crore which Commission had approved.
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From the details of Capital expenditure incurred during FY 2016-17 it is observed that the licensee, on schemes mentioned at Sr. No. 1, 3 & 16 has incurred expenditure higher than the capital expenditure approved by the Commission. Licensee has not specified any reason for these deviations.
Further, as per Regulation 8.3 (b) of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012, capital expenditure is a controllable item. As such the licensee should have exercised proper control over the item wise Capital Expenditure approved by the Commission.
Regulation 9.10 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 further specifies as under:-
“In case the capital expenditure incurred for approved schemes exceeds the amount as approved in the capital expenditure plan, the generating company or the transmission or the distribution licensee, as the case may be, shall file an application with the Commission at the end of control period for truing up the expenditure incurred over and above the approved amount. After prudence check, the Commission shall pass an appropriate order on case to case basis. The True-up application shall contain all the requisite information and supporting documents”.
Provided that any additional capital expenditure incurred on account of time over run and / or on unapproved schemes not covered under regulation 9.9 or unapproved changes in scope of approved schemes shall not be allowed by the Commission unless the generating company or the licensee, as the case may be, is able to give adequate justification for the same”. The licensee is directed to adhere to the Regulations.
3.3.2 Review of Capital Investment Plan for FY 2017-18
Regulation 9.7 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012, specifies that in the normal course, the Commission shall not revisit the approved capital investment plan during the control period. However, during the mid-year performance review and True- up, the Commission shall monitor the year wise progress of the actual capital expenditure incurred by the generating company or the licensee vis-à-vis the approved capital expenditure and in case of significant difference between the actual expenditure vis-a-vis the approved expenditure, the Commission may True-up the capital expenditure, subject to
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prudence check, as a part of annual True-up exercise on or without an application to this effect by the generation company/licensee. The generating company and the licensee shall submit the scheme-wise actual capital expenditure incurred along with the mid-year performance review and True-up filing.
Accordingly, both the distribution licensees, through filing of their Annual Performance Review petitions for FY 2017-18 and subsequent submissions, submitted revised capital investment plan for FY 2017-18. After examining these, the Commission allows following revised capital investment plans.
a) UHBVNL
The licensee through their Annual Performance Review Petition and further submissions has indicated that the expenditure upto Dec. 2017 is Rs. 301 Crore against the approved expenditure of Rs. 800 Crore. The licensee has further intimated that for FY 2017- 18 the Capital expenditure is expected to be Rs. 394.72 Crore as per the details provided as under :-
(Expenditure in Crore)
Sr. Name of work Planned for FY Status of completed works No. 2017-18 Expenditure Expenditure Incurred Tentative Reason for over/ under (Rs. In upto Dec. 2017 Expenditure Incurred expenditure Cr.) (Rs. in Cr.) during FY 2017-18 (Rs. in Cr.) 1 Creation of new 33 kV sub-stations 57.5 59.59 75.43 Work of 36 Nos. new 33 (Nos.) kV substations and 108 2 Augmentation of existing 33 kV 55.0 Nos. augmentation of sub-stations (Nos.) existing 33 kV substations 3 Erection of new 33 kV lines (km) 16.67 has been allotted during FY 4 Erection of new 11 kV lines (km) 8 2017-18 5 Bifurcation/Trifurcation of 10 overloaded 11 kV feeders 6 Augmentation of existing 33 kV 6.45 lines (km) 7 Construction of UHBVNL Office 10 6.37 10.00 Building at Panchkula 8 Civil Works (Sub-division office 10 Munak, Amin, Pundri, Gharaunda, Division office Naraingarh & Circle Office Kurukshetra, Panipat, Sonepat, .2nd Office Building at Rohtak, Renovation of M&T Lab & TRW/Store, Cash Collection Centers, Boundary Wall) 9 Shifting of 33 kV dangerous Lines 2 0 0.20 (CM Announcement) 10 Shifting of 11 kV dangerous Lines 10 0 0 The case is pending with (CM Announcement) the State Govt. for approval of funds 11 Works to be carried out under 20 0 0.30 The work has been allotted DDUGJY scheme for system during FY 2017-18 strengthening including SAGY 12 Works to be carried out under 15 0 1.60 IPDS scheme for system strengthening 13 LRP works to be carried out under 285 0.59 0.59
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Sr. Name of work Planned for FY Status of completed works No. 2017-18 Expenditure Expenditure Incurred Tentative Reason for over/ under (Rs. In upto Dec. 2017 Expenditure Incurred expenditure Cr.) (Rs. in Cr.) during FY 2017-18 (Rs. in Cr.) MGJG scheme and urban feeder sanitization Scheme on Turn Key Basis (Uday) 14 Rural Feeder Monitoring System 0.66 0 0.02 (AMR of new Rural Feeders) Being implemented by RECPDCL 15 Mahatma Gandhi Gramin Basti 5 0.01 0.01 Yojana (MGGBY) Sub-Total - I 511.28 66.56 88.15 16 Relocation of energy meters of DS 0 233.65 305.75 & NDS consumers outside their premises.(Procurement of MCBs and 2cx10 mm2 LT PVC armored/ un-armored cables 17 Release of tube well connections 30 18 Material required for release of 200 non-AP connections, replacement of old assets and system improvement Budget 19 Procurement of single phase 0 meters for replacement of defective meters and release of new connections. 20 Procurement of three phase 0 meters for replacement of defective meters and release of new connections. 21 Procurement of power T/F and 23.72 allied equipments such as 33 kV CTS (current transformers), 33 kV PTs (potential transformers), 33 kV and 11 kV VCBs (Vacuum Circuit Breakers), 33 kV Control and Relay Panels etc. 22 Procurement of LT AB Cables for 0 loss reduction plan 23 Re conductoring / augmentation 0 of 11kV lines/ LT lines with 100mm2 in urban areas and 80/50 mm2 in rural areas in kms (in addition to 0quantity covered in serial number 16,) Sub-Total - II 253.72 233.65 305.75 24 R-APDRP (Part-A) including DT 31 0.74 0.74 Metering 25 Pilot Project (Smart Grid in 2 0.08 0.08 Panipat) NEDO funded Nigam's expenditure 3 Cr. (MoP) 26 Engagement of IT firm for Roll out 2 0 DPR has been approved by of R-APDRP Application to Non R- DRC on dated 08.05.2017. APDRP Areas, Procurement and On the behalf of both installation of IT hardware at end Utilities. DHBVN has floated locations of Sub-Divisions, the NIT on dated Providing MPLS connectivity at 15.12.2017. Price Bid has end location been opened on dated 27.04.2018 and LOI has been issued. 27 Shifting of Meters in Pillar Boxes 28 R-APDRP in Non APDRP Area DPR has been approved by DRC on dated 08.05.2017. On the behalf of both Utilities. DHBVN has floated the NIT on dated 15.12.2017. Price Bid has been opened on dated 27.04.2018 and LOI has
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Sr. Name of work Planned for FY Status of completed works No. 2017-18 Expenditure Expenditure Incurred Tentative Reason for over/ under (Rs. In upto Dec. 2017 Expenditure Incurred expenditure Cr.) (Rs. in Cr.) during FY 2017-18 (Rs. in Cr.) been issued. 29 Setting up of a new testing lab for materials, i.e. cable, conductors, transformer oil, distribution transformers, etc. 30 Revamping of existing M&T (Meter Testing) labs at (Kaithal, Yamunanagar, Karnal, Dhulkote & Rohtak) 31 Annual maintenance Contract of Automatic Power Factor Correctors 32 Site testing of DS, NDS consumers upto 20 KW in urban area 33 Compulsory metering on Feeders, DTs, Boundary Meters for Villages in Rural Areas 34 Consumer indexing and GIS mapping of losses 35 Installation of meter on 33 kV Incomer for energy auditing Sub-Total - III 35 0.82 0.82 Grand Total (I to III) 800.00 301.03 394.72
b) DHBVNL
The licensee in his petition to ARR of FY 2017-18 had projected its Capital Expenditure as RS. 1200 Crore and later revised it to Rs. 1260 Crore vide its subsequent submissions. However, the Commission allowed Rs. 1100 crore Capital expenditure for FY 2017-18.
DHBVNL in its instant Petition for Annual Performance Review of FY2017-18 has submitted the capital expenditure incurred during FY2017-18 of Rs. 808.36 Crore against the approved CIP of Rs. 1100 Crore the detail of which is as under:-
(Expenditure in Rs. Crore) Capital Investment Plan for FY 2017-18 Annexure-I (Rs. In Crores) Sr. Proposed CAPEX Actual CAPEX (Rs. Categories No. (Rs. In Cr) In Cr) AT&C loss reduction plan Procurement of single phase meters for replacement of defective meters 1 34.78 30.71 and release of new connections. Procurement of three phase meters for replacement of defective meters and 2 16.80 14.74 release of new connections 3 LT Connectivity of already executed HVDS works 3.62 2.96 Power Factor Improvement (Providing automatic power factor correctors) 0.88
4 6.40
Load Growth schemes
Creation of new 33 kV sub-stations alongwith associated 33 kV & 11 kV 5 82.03 lines 124.29 6 Augmentation of existing 33 kV sub-stations 15.00 7 Augmentation of existing 33 kV lines 6.00 Bifurcation of 11 kV feeders (Work of bifurcation of feeders, augmentation of 8 95.18 100.94 ACSR) and segregation of Rural Urban load 9 Material required for release of Non-AP connections & replacement of old 116.16 118.98
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Capital Investment Plan for FY 2017-18 Annexure-I (Rs. In Crores) Sr. Proposed CAPEX Actual CAPEX (Rs. Categories No. (Rs. In Cr) In Cr) assets Release of Tube well connection on turnkey basis and segregation of AP 10 80.00 78.11 load from Rural Urban feeders Procurement of power transformers and allied equipment such as 33 kV 11 CTs, 33 kV PTs, 33 kV and 11 kV VCBs, 33 kV Control and Relay Panels 20.00 18.26 etc 12 Release of BPL connections under RGGVY schemes 9.60 13.92 R-APDRP schemes
13 Implementation of R-APDRP (Part-A) including SCADA 8.00 - 14 Implementation of SCADA under R-APDRP (Part-B) in Faridabad town - - System Strengthening Works under IBRD loan and IBRD equity - 15 Under IBRD Loan - 9.29 16 Under IBRD Equity - - Other Works
Setting up of a new testing lab for materials i.e. cable, conductors, 17 6.11 - transformer oil, distribution transformers etc. at Hisar Revamping of existing Meter Testing labs. at Dadri, Sirsa, Hisar, Faridabad 18 1.42 1.19 & Gurgaon Maintenance free earthling using 'Ground Enhancing Material' for 19 2.65 0.58 Distribution Transformers, Meter Pillar Boxes and H-pole etc 20 Installation of meters on 33 kV Incomers at sub-stations for energy auditing. 3.20 5.48 Relocation of energy meters of DS & NDS consumers outside their 21 6.84 23.63 premises in Meter Pillar boxes 22 Civil Works 16.08 13.95 Shifing of HT line (33 kV), passing over authorized/un-authorized colonies 23 13.20 4.75 under jurisdiction of DHBVN. Improvement works under loss reduction plan , replacement of iron pole and 24 26.93 60.21 providing of PAT Mahara gaon jagmag gaon scheme for rural area and feeder sanitization for 25 150.00 146.67 Urban area Other works for system improvement - Procurement of IT Equipment & 26 8.00 0.34 Softwares 27 Smart City Gurgaon 200.00 1.62 28 Door Step Services for Ease of Doing Buisness under DHBVN jurisdiction 10.00 - 29 Implementation of SMART GRAM- an initiative of HE President of India 10.00 - Total 948.00 771.49 CAPEX under UDAY (Ujjwal DISCOM Assurance Yojana)
Compulsory Feeder and Distribution Transformer metering Feeder meters 30 have been provided on 100% feeders. AMR is already implemented on 1.60 0.00 1078 feeders. AMR on 4535 Number feeders is to be provided DT meters with AMR have been provided on DTs in areas under RAPDRP 31 Part - A for 17535 meters. DT Meters for left out urban areas is to be 8.80 0.00 provided approx. 2000 DTs Boundary meters for Villages in Rural Areas (3648 number of villages i.e. 32 30.40 0.00 7296 meters) DT Meters for rural areas is to be provided for reduction of AT&C losses to 33 16.00 0.00 30% Engagement of IT firm for Roll out of R-APDRP Application to Non R- 34 APDRP Areas, Procurement and installation of IT hardware at end locations 0.00 24.00 of Sub-Divisions, Providing MPLS connectivity at end location 35 Consumer indexing and GIS mapping of losses 0.00 36 Replacement of bare conductor with LT-AB cable in theft prone areas 35.20 23.01 Replacement of defective meters and Relocation of energy meters of DS&NDS consumers outside their premises in MCBs (Procurement of 1X1 37 24.00 13.86 & 4X1 MCBs for 1 Ph Meters, 1X1 MCBs for 3 Ph Meters, 2cx10 mm2 and 4cx16 mm2 LT PVC armoured/un-armoured cables and meters). Smart metering of consumers consuming above 200 units AMI Project for smart meters already under implementation in Gurgaon and Faridabad City 38 for about 100000 consumers and is expected to be completed by December 12.00 0.00 2017 (under World Bank Project). Further Roll out will be based on the results. Expected Cost for the project is around Rs 105 Crore) Total 1,100.00 808.36
The Commission observes that there has not been any expenditure on the works mentioned at CIP at Sr. No. 13,17,28 and Sr. No. 30 to 35 and 38 for which an amount of Rs.191.71 Crore was approved. The licensee is required to give the reason for nil progress against these works during FY 2017-18.
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3.3.3 Capital investment plan for FY 2018-19.
The licensees through their Petition for true up of FY 2016-17, annual performance review for FY 2017-18 and ARR for FY 2018-19 has submitted the capital investment plan for FY 2018-19, however, revised the same in their subsequent submissions. The details are as under:-
a) UHBVNL
Capital Expenditure
The Petitioner UHBVNL has submitted that in order to achieve the loss targets as proposed in the following chapters, UHBVN proposed to incurr a Capital Expenditure of Rs 1484.35 Cr. In the FY 2018-19.
The funding of capital expenditure in FY 2017-18and FY 2018-19 is being arranged by debt from REC, PFC and supported further from equity and consumer contribution. The table below reflects the funding arrangement of capital expenditure during the control period.
Further, The details of Scheme wise CAPEX for the FY 2018-19 has been given in the table below:
Scheme Wise details for the FY 2018-19
CAPEX Unit Rate Sr.no. Categories Quantity (Rs. in (In Rs.) Cr.) 1 AT&C loss reduction plan Procurement of single phase meters for a replacement of defective meters & release of new 500000 Nos. 683 34.15 connections. Procurement of three phase meters for b replacement of defective meters & release of new 140000 Nos. 1687 23.16 connections. Power Factor Improvement (Providing automatic c 18.66 power factor correctors) Providing of LT Capacitors on 400 KVA and above d 16.32 Distribution Transformers 2 Load Growth schemes Creation of new 33 kV sub-stations alongwith a 50 Nos. 30000000 150.00 associated 33 kV & 11 kV lines b Augmentation of existing 33 kV sub-stations 120 Nos. 8000000 96.00 c Augmentation of existing 33 kV lines 110 Km. 725000 7.97 Bifurcation of 11 kV feeders (Work of bifurcation of d 498 Nos. 76.19 feeders, augmentation of ACSR). Material required for release of Non-AP e 230.00 connections & replacement of old assets
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CAPEX Unit Rate Sr.no. Categories Quantity (Rs. in (In Rs.) Cr.) Release of Tube well connection on turnkey basis f and segregation of AP load from Rural Urban 3680 Nos. 125000 46.00 feeders. Procurement of Power Transformers - 30 Nos. and allied equipment such as 33 kV CTs - 90, 33 kV PTs - g 23.72 30, 33 kV VCBs - 30 and 11 kV VCBs-240, 33 kV Control and Relay Panels - 30 etc. Release of BPL connections under DDUGJY schemes. Work under Distt. Ambala, Kaithal, h 22206 Nos. 3000 6.60 Karnal, Yamunanagar, Kurukshetra & Sonepat (22206 BPL Connections) i 11 KV Lines 608.72 Km. 24.97 j Distribution Transformer (63,100, 200 kVA) 3815 Nos. 68.21 k LT ABC Line 1213.21 Km. 56.62 367 / 239.63 Augmentation- DTR, Existing line on conductor to / 122.32 l 13.51 ABXLPE, Augmentation of 11kV lines Nos./Km./K m. m Energy Meters 43592 Nos. 12.24 n Solar Project 952 Kwp 7.94 3 R-APDRP schemes a Implementation of R-APDRP (Part-A) 8.00 4 Other works Maintenance free earthling using 'Ground a Enhancing Material' for Distribution Transformers, 9600 Nos. 5000 4.80 Meter Pillar Boxes and H-pole etc. Installation of meters on 33 kV Incomers at sub- stations for energy auditing. Work already awarded b on 02.06.2017. Approximately 40% work already - - - completed and provision has been made for taking care of remaining works. c Civil Works 24.80 Shifting of HT line (33 kV), passing over d authorized/un-authorized colonies under 1.70 jurisdiction of UHBVN Mahara Gaon Jagmag Gaon scheme for rural area e and feeder sanitization for Urban 300.00 area/LRP/Replacement of iron pole. Other works for system improvement - f 5.00 Procurement of IT Equipment & Software Smart City Karnal (HT & LT Lines, DTs, U/G Cables, g 50.00 RMUs and FRTUs Etc.) Smart City Panchkula (HT & LT Lines, DTs, U/G h 35.00 Cables, RMUs and FRTUs Etc.) Smart City Panipat (HT & LT Lines, DTs, U/G Cables, i 35.00 RMUs and FRTUs Etc.) Industrial Area Kundli (HT & LT Lines, DTs, U/G j 10.00 Cables, RMUs and FRTUs Etc.) Shifting of 11 lines passing over residential areas k 20.00 under UHBVN l Works under EESL (Smart Meters) 220000 Nos. 2500 55.00 m Setting up of a new testing lab for materials, i.e. 2.07
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CAPEX Unit Rate Sr.no. Categories Quantity (Rs. in (In Rs.) Cr.) cable, conductors, transformer oil, distribution transformers, etc. at Karnal Revamping of existing M&T (Meter Testing) labs at n 10.71 (Kaithal, Yamunanagar, Karnal, Dhulkote & Rohtak) Total 1474.35 1. B) CAPEX under UDAY (Ujwal DISCOM
Assurance Yojana) Scaling of IT project to Non R-APDRP areas covering the following:- 1. Establishment of IT infra in SDO & Other offices and its connectivity with Data Centre. 2. AMR for Non R-APDRP feeders. 1 10.00 3. DT metering for 2953 in Non R-APDRP areas. 4. AMR for HT & LT CT operated meters. Total DPRs cost for the above works is Rs. 16.66 Crs and approximately, 60% expenditure is likely to be incurred during FY 2018-19. 2 Boundary meters for Villages in Rural Areas - Total 10.00 Grand Total 1484.35 b) DHBVNL
The Petitioner DHBVNL has submitted that in order to achieve the loss targets as proposed in the following chapters, DHBVN propose a Capital Expenditure of Rs 1300 Cr for FY 2018-19.
The funding of capital expenditure in FY 2017-18 and FY 2018-19 is being arranged by debt from REC, PFC and supported further from equity and consumer contribution.
Further, the Details of Scheme wise CAPEX for the FY 2018-19 has been given in the table below:-
Scheme Wise details for the FY 2018-19
1 AT&C loss reduction plan
Procurement of single phase meters for replacement of 7,30,000 a defective meters & release of new connections and 683 50.00 Nos. procurement of Smart Meters. Procurement of three phase meters for replacement of 1,75.000 b defective meters & release of new connections and 1687 30.00 Nos. procurement of Smart Meters. Power Factor Improvement (Providing automatic power c 16.00 factor correctors) Providing of LT Capacitors on 400 KVA and above d 33.00 Distribution Transformers 2 Load Growth schemes
Creation of new 33 kV sub-stations along with a 55 Nos. 3,00,00,000 150.00 associated 33 kV & 11 kV lines
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b Augmentation of existing 33 kV sub-stations 57 Nos. 25,00,000 14.00 c Augmentation of existing 33 kV lines 70 KM 7,00,000 5.00 Bifurcation of 11 kV feeders (Work of bifurcation of d 391 Nos. 25.00,000 50.00 feeders, augmentation of ACSR). Material required for release of Non-AP connections & e 171.00 replacement of old assets Release of Tube well connection on turnkey basis and f 5000 Nos. 1,25,000 62.00 segregation of AP load from Rural Urban feeders. 45 Nos. 4200000 Procurement of power transformers and allied (10 MVA) (10 MVA) g equipment such as 33 kV CTs, 33 kV PTs, 33 kV and 05 Nos. 28.00 5300000 11 kV VCBs, 33 kV Control and Relay Panels etc. (12.5 (12.5 MVA) MVA) Release of BPL connections under RGGVY schemes. Work already awarded for Palwal (9163 BPL Connections), Gurugram (2882 BPL Connections) and Faridabad (1494 BPL Connections) Circles on H 4.00 15.11.2016, 31.01.2017 and 02.03.2017 respectively. Approximately 90% work likely to be completed in FY 2017-18 and provision has been made for taking care of remaining/residual works. 535.96 i 11 KV Lines 21.98 kms j Distribution Transformer (63,100, 200 kVA) 850 Nos. 15.20 k LT ABC Line 182 kM 8.49 Augmentation- DTR, Existing line on conductor to 157/926/7 l 11.90 ABXLPE, Augmentation of 11kV lines 71 m Metering (3 phase), Solar Energy Meter 2524 Nos. 1.46 n Solar Project 103 Nos. 0.84 3 R-APDRP schemes
a Implementation of R-APDRP (Part-A) 8.80
4 Other works
Maintenance free earthling using 'Ground Enhancing 6000 a Material' for Distribution Transformers, Meter Pillar 5,000 3.00 Nos. Boxes and H-pole etc. Installation of meters on 33 kV Incomers at sub- stations for energy auditing. Work already awarded on 350 b 02.06.2017. Approximately 40% work already Sub- 2.00
completed and provision has been made for taking Stations. care of remaining works. c Civil Works 10.00
Shifing of HT line (33 kv), passing over authorized/un- authorized colonies under jurisdiction of DHBVN. Note:-Hon’ble Chief Minister has made an 7 Nos. 33 announcement on the floor of Haryana Vidhan Sabha KV lines that all dangerous wires of 33 KV and above levels under passing over the various colonies shall be removed. d Rewari 5.00 Accordingly, Worthy ACS/Power, Govt. of Haryana, and Power Deptt. directed to prepare the detailed scheme Narnaul in this regar. Also, Worthy ACS/Power, Govt. of Circles Haryana, Power Deptt. has desired that it may be made part of the CAPEX Plan and approval of HERC be obtained. Mahara Gaon Jagmag Gaon scheme for rural area and e feeder sanitization for Urban area/LRP/Replacement of 190.00
iron pole. Other works for system improvement - Procurement of f 8.00 IT Equipment & Softwares Smart City Gurgaon (HT & LT Lines, DTs, U/G Cables, g RMUs and FRTUs Etc.) including SCADA Project, IMT, 235.00
Manesar (Rs. 24 Crores)
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Smart City Faridabad, Hisar & Rewari (HT & LT Lines, h 68.00 DTs, U/G Cables, RMUs and FRTUs Etc.) Shifting of 11 lines passing over residential areas i 20.00 under DHBVN. 220000 J Works under EESL (Smart Meters) 2500 55.00 Nos. Total 1277.67
B) CAPEX under UDAY (Ujjwal DISCOM Assurance Yojana) Scaling of IT project to Non-RAPDRP areas covering the following: - 1. Establishment of IT infra in SDO & Other offices and its connectivity with Data Centre. 2. AMR for Non-RAPDRP feeders. 1 3. DT metering for 2953 in Non-RAPDRP areas. 12.33
4. AMR for HT & LT CT operated meters. Total DPRs cost for the above works is Rs. 20.55 Crores and approximately, 60% expenditure is likely to be incurred during FY 2018-19. Boundary meters for Villages in Rural Areas (3648 3648 2 40000 10.00 number of villages i.e. 7296 meters) meters Total 22.33
Grand Total 1300.00
Licensees have not submitted details regarding financial tie ups to carry out the proposed Capital Expenditure plan and has not given the status of NITs/ tenders and activities undertaken to implement the CIP during FY 2018-19.
UHBVNL, who have proposed an ambitious capital expenditure plan of Rs. 1484.35 Crore, the Commission feels that it seems to be on higher side in view of their past experience. As UHBVNL had only been able to incur an expenditure of RS. 488.13 Crore and Rs. 368.52 Crore and 371.71 Crore during FY 2014-15, FY 2015-16 and FY 2016-17 respectively and expected to incur an expenditure Rs. 394.72 Crore during FY 2017-18. The Commission, however, views that adequate capital expenditure shall be required to meet the loss reduction targets envisaged under UDAY scheme and to strengthen the distribution system. The Commission also observes that expenditure to tune of 300 Crore (at sr. no. 2 (e)) has been proposed for Mara Gaon Jagmag Gaon (MGJG) scheme seems to be optimistic targets. In view of above, the Commission approves a overall Capital Expenditure plan of Rs. 1262 Crore for UHBVNL for FY 2018-19 which includes Rs. 130 Crore for implementation of smart grid initiatives for smart city of Karnal, Panchkula, Panipat and Industrial area Kundli as per CIP approved. It is further directed to install smart grid in Industrial Area Bahadurgarh also. Further, DISCOMs shall also install smart meter along with smart grid in their Power Colonies. For preparation of the Smart Grid Roadmap, the services of the Indian Smart Grid Forum may be engaged, if required.
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The Licensee is directed to revised its Capital expenditure plan accordingly and submit the scheme wise details of the proposed expenditure to the Commission within one month of the order.
Further, in case of DHBVNL the actual capital expenditure for FY 2015-16 and FY 2016-17 has been Rs. 588.15 Crore and Rs. 640.93 Crore respectively. For the FY 2017-18, DHBVNL had proposed a capital expenditure of Rs. 1260 Crore which included Rs. 200 Crores towards the first phase of Smart Grid project of Gurgaon. The expenditure of Rs. 300 Crore for MGJG scheme and Rs. 105.19 Crore for bifurcation/trifurcation of feeders which was considered to be on the higher side. The Commission approved the overall capital expenditure plan for Rs. 1100 Crore only for FY 2017-18. However as per the ARR Petition for true up of FY 2016-17, annual performance review for FY 2017-18 and ARR for FY 2018- 19 filed by the petitioner the licensee has submitted the actual Capital Expenditure for 2017- 18 to be Rs. 771.49 Crore. The Commission further observed that DHBVNL has projected its Capital expenditure for FY 2018-19 to be Rs. 1300 crore which includes an expenditure of Rs. 190 crore for MGJG and Rs. 250 crore for the scheme smart city Gurgaon as major expenditure. In view of the licensee past performance on Capital expenditure, Commission approves the Capital expenditure of Rs. 1170 crore for FY 2018-19 for DHBVNL which includes the expenditure of Rs. 250 crore for smart city Gurgaon and further direct the licensee to revise their capital expenditure plan accordingly and submit the scheme wise details of proposed expenditure to the Commission within one month from the data of issue of this Order.
Both the licensees are further directed that they shall regulate their capital expenditure plans for FY 2018-19 as per Regulations 9.7 to 9.12 of the Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012.
3.4 Review of Technical Parameters
The Commission has reviewed the performance of the distribution system of the two distribution licensees i.e. UHBVNL and DHBVNL, based upon the details made available for FY 2016-17 & FY 2017-18 and has also examined the projected performance for FY 2018-19 based upon filing of their Annual Performance Review petition for FY 2016-17, Revised Annual Revenue Requirement of 2017-18 & proposed Annual Requirement for FY 2018-19 including subsequent submissions thereof as per Multi Year Tariff mechanism. The observations of the Commission in this regard are as below:-
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3.5 Distribution Losses
The year-wise position of distribution losses as per the information provided by UHBVNL and DHBVNL is presented in the table below:-
Distribution Losses (%) Year UHBVNL DHBVNL 2001 – 2002 31.74 29.33 2002 – 2003 35.02 35.02 2003 – 2004 32.36 33.34 2004 – 2005 30.65 32.72 2005 – 2006 31.04 30.90 2006 – 2007 28.67 29.65 2007 – 2008 28.56 27.54 2008 – 2009 27.02 25.19 2009 – 2010 25.92 26.97 2010 – 2011 33.30 22.95 2011 – 2012 31.20 23.71 2012 – 2013 31.26 22.38 2013 – 2014 32.40 23.66 2014 – 2015 30.58 24.47 2015 – 2016 31.49 24.47 2016 – 2017 30.08 21.99 2017 – 2018 24.82 17.94 2018-19 (Projected) 20.00 14.14
The Commission observes that in spite of making huge capital expenditure on loss reduction, system strengthening/up gradation, energy meters, IT interventions etc, the UHBVNL has miserably failed to achieved the distribution loss targets as stated in Commission’s Order on earlier ARRs of the two distribution licensees. This reflects adversely on the operations and working of the UHBVNL. In case of UHBVNL, the losses in a span of eight years i.e. from FY 2009- 10 to FY 2017-18, are almost at the same level and hovering around 25 % to 30%, which is unacceptable by any standard. The loss level achieved by the UHBVNL during FY 2017-18 are almost same which were achieved in FY 2009-10, however, with an reduction of only 1.1 % . In case of DHBVNL, these have reduced only by 9.03% in a span of last eleven years. The Commission observes that the distribution losses reduction is one of the key factors for financial revival of Licensees. The Commission expect from licensees to make all out efforts and to achieve the targets as prescribed by the Commission. The Commission, however, appreciates the efforts being made by DHBVNL for achieving the loss targets and to bring down the losses significantly during the FY 2017-18.
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The year-wise position of the line losses on 11kV rural and urban feeders of the licensees, as per the information provided by UHBVNL and DHBVNL, is given in the table below:-
Urban Feeders (Nos.) Rural Feeders (Nos.) Total Feeders Feeders Feeders Feeders Feeders Feeders Total Number with with losses with with with with losses Number of Distribution of Urban losses more than losses losses losses more than rural RDS Licensee feeders more than 25% more than more than more than 25% feeders ending 25% ending FY 50% 50% 50% ending FY ending FY FY 2017- ending FY 2017-18 ending FY ending FY ending FY 2016-17 2017-18 18 2015-16 2015-16 2016-17 2017-18 74 704 UHBVNL 653 271 192 902 813 793
DHBVNL 736 206 159 112 924 539 562 502 An examination of the data of 11 KV feeders under UHBVNL made available for the period April, 2017 to March, 2018, shows that 74 number feeders out of total 653 number feeders in urban areas were having losses above 25% and 704 number feeders out of total 902 numbers feeders in rural areas were having losses above 50%. In case of UHBVNL, the number of rural feeders having losses above 50 % have reduced from 793 to 704, whereas, number of urban feeders having losses above 25 % have reduced from 192 to 74 during the above said period of FY 2017- 18. Similar data of DHBVNL for the period April, 2017 to March, 2018 shows that 112 number feeders out of total 736 number feeders in urban areas were having losses above 25% and 502 feeders out of total 924 number feeders in rural areas were having losses above 50%. The Commission observes that in totality, Discoms have managed marginal improvement, however, still far behind the targets set by the Commission vide its Tarff Order dated 11.07.2017 in this respect in spite of inuring huge capital expenditure on system strengthening schemes/activities and Mhara Gaon Jagmag Gaon (MGJG) scheme. The Commission also noted with concern that even after implementation of Mhara Gaon Jagmag Gaon (MGJG) scheme on rural RDS feeders, the number of rural feeders with losses above 50% has not marked any significant reduction. The data submitted by the licensees also reveals that still urban feeders having loses as high as 85% and Rural Domestic Supply (RDS) feeders having losses as high as 95% exists in the system which is not acceptable by any means.
During public hearing as well as in their written objections, consumers and other stakeholders expressed their concern over high distribution loss levels both in UHBVNL and DHBVNL. They pointed out that cost of service has increased significantly due to unreasonably high distribution loss level and it would be
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The Commission in its Order dated 07.05.2015 on revised ARR of two licensees for the FY 2015-16 had directed the licensees to bring down the total number of rural feeders with line losses above 50% as on 31.03.2015 to half by the end of the FY 2015-16 and to bring down the losses of all urban feeders below 25% by the time of next ARR/APR filing. However, a marginal improvement was noticed by the Commission at the time of filing of tariff petition for FY 2016-17 by the distribution licensees. As the distribution Licensees failed to achieve the above targets, the Commission in its tariff Order dated 01.08.2016 for FY 2016-17 had directed the Licensees to introspect the reasons and to submit detailed report for not achieving the above targets. However, even after repeated pursuance, the targets envisaged were not achieved and only depicted marginal improvement. As both the licensee had failed to achieve the targets envisaged by the Commission in its Order dated 01.08.2016 for FY 2016-17, the Commission again in its tariff order dated 11.07.2017 directed the distribution licensees to bring down the total number of rural feeders with line losses above 50% as on 31.03.2017 to half and to bring down the losses of all urban feeders below 25% by the time of next ARR/APR filing.
The distribution licensees have again failed to achieve the targets envisaged by the Commissions in its tariff Order dated 11.07.2017. The distribution licensees in their explanation has submitted that rampant theft, electromechanical meters in the system, meter inside the consumer premises etc. are the reasons for high losses and informed about the efforts made in this regard. Licensees however, have submitted that various loss reduction initiatives such as implementation of MGJG scheme, sanitation of feeders, replacement of defective/Electro-mechanical meters, relocation of meters, replacement of bare conductor with AB Cable, distribution system augmentation to remove overloading, release of new connections in unauthorised colonies, regularization of unauthorized connections, DSM initiatives, IT implementation, theft detection drives are being exercised to reduce the losses.
The distribution licensees are again directed to file, within two (2) months, detailed reasons for yet not achieving the targets determined by the Commission in its tariff Order dated 11.07.2017 along with action taken/plan to achieve the same. The Commission also directs the distribution licensees to
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3.6 Loss Reduction trajectory
In their Multi Year Tariff filing for control period FY 2014-15 to FY 2016-17, the two licensees had submitted the following distribution loss trajectory for FY 2013-14 and the control period.
Distribution Loss trajectory for the Discoms Licensee FY 2013-14 FY 2014-15 FY 2015-2016 FY 2016-17 DHBVNL 20.30% 19.01% 17.70% 16.70% UHBVNL 27.50% 25.00% 23.00% 20.90% These were the same as taken by them in their Financial Restructuring Plan (FRP) approved by the State Government. The Commission accorded it's in principle approval to this FRP vide Memo No. 3078/HERC/Tariff-2 FRP/2013 dated 12.11.2013.
The Govt. of India, Ministry of Power vide letter dated 27.04.2015 has approved the following revised AT&C loss trajectory for the two licensees.
Revised AT&C loss trajectory approved by MOP, GOI Distribution Licensee 2013-14 2014-15 2015-16 2016-17 2017-18 DHBVNL 38.25% 23.96% 21.35% 18.74% 16.10% UHBVNL 33.78% 31.29% 27.88% 24.48% 22.00% Haryana State 36.26% 27.55% 24.56% 21.55% 19.05% In their Annual Performance Review Petitions for FY 2016-17 (including revised Annual Revenue Requirement for FY 2017-18 and Annual Requirement for FY 2018-19) as per Multi Year Tariff mechanism, the two licensees submitted the following revised distribution loss trajectory considering the tripartite MOU agreement under UDAY:-
Distribution Loss trajectory projected by the Discoms during ARR filing for FY 2018-19. Distribution Licensee FY 2015-16 (Actual) FY 2016-17 (Actual) FY 2017-18 FY 2018-19 DHBVNL 24.47% 22.50% 17.94% 14.14% UHBVNL 31.49% 29.86% 24.00% 20.00%
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Regulation 57.2 of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 specifies the following norms for collection efficiency for the distribution licensees.
Norms for Collection Efficiency specified by the Commission Distribution Licensee FY 2013-14 FY 2014-15 FY 2015-16 FY 2016-17
DHBVNL 98% 98.5% 99% 99% UHBVNL 98% 98.5% 99% 99%
Further, the Commission in its Tariff Order for the FY 2017-18 dated 11.07.2017 had considered the collection efficiency norms as 99% for FY 2017-18. The same norms of collection efficiency are also considered for FY 2018-19.
It has further been specified that any over achievement or under achievement in respect of Collection Efficiency shall be subject to incentive and penalty framework as specified in Regulation 12.
From the perusal of information on Collection Efficiency submitted by the distribution licensees in their Annual Performance Review petitions for FY 2016- 17(including revised Annual Revenue Requirement for FY 2017-18) as per Multi Year Tariff mechanism, the Commission observes that DHBVNL has achieved the normative level of Collection Efficiency during the FY 2016-17 and 2017-18, whereas UHBVNL failed to achieve the normative level of Collection Efficiency during the FY 2016-17 however managed to achieve the same during the FY2017-18. The Collection Efficiency in some of the rural area and urban has been reported as low as 83% and 95% respectively. Constant under recovery of revenue attributes to financial losses on account of addition borrowings by the licensees to meet their revenue shortfall besides accumulation of debts which in turn may turn into bad debts.
Based upon actual performance during for FY 2016-17 and FY 2017-18 and that projected for FY 2018-19, the AT&C losses of the two licensees works out as below:-
Loss trajectory projected by the Discoms FY 2016-17 FY 2017-18 FY 2018-19 DHBVNL UHBVNL DHBVNL UHBVNL DHBVNL UHBVNL Distribution Losses 22.50% 29.86% 17.94% 24.82% 14.14% 20.00%
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FY 2016-17 FY 2017-18 FY 2018-19 DHBVNL UHBVNL DHBVNL UHBVNL DHBVNL UHBVNL Collection efficiency 101.43% 98.71% 101.62% 99.14% 99.00% 99.00% AT&C Losses 21.39% 30.76% 16.63% 25.46% 15.00% 20.80% AT&C Loss trajectory as per 22.48% 25.94% 18.76% 20.04% 15.00% 15.01% UDAY (MoU) Gap -1.09% 4.82% -2.13% 5.42% 0% 5.79%
From the above, following is inferred:- a) FY 2016-17
From the data it is evident that DHBVNL achieved the AT&C targets as envisaged under UDAY scheme whereas UHBVNL has failed to achieve the same. UHBVNL during FY 2016-17 has only achieved a reduction of 3.12 % in AT&C losses as compared to previous FY 2015-16, against the target reduction of 7.94% envisaged under UDAY. The under achievement of AT&C targets by UHBVNL shall have an adverse impact to the benefits envisaged under the UDAY scheme. b) FY 2017-18
From the data it is evident that DHBVNL achieved the AT&C targets as envisaged under UDAY scheme whereas UHBVNL has failed to achieve the same. UHBVNL during FY 2017-18 has only achieved a reduction of 5.30% in AT&C losses as compared to previous FY 2016-17, against the target reduction of 10.72% envisaged under UDAY. The under achievement of AT&C targets by UHBVNL will adversely impact the benefits envisaged under the UDAY scheme. c) FY 2018-19
The AT&C losses have been pegged in line with the losses envisaged under UDAY scheme. Considering the past performance huge efforts shall be required to meet the AT&C loss targets pegged by the Licensees.
UHBVNL is directed to explain, within three months, from the date of this order, the reason of under achievement even after re-fixing of their AT&C loss trajectory envisaged under UDAY scheme and submit an action plan to achieve the target for the FY 2018-19.
As specified under Regulation 12 of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff
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Framework) Regulations, 2012, any overachievement and underachievement of the loss trajectory and the collection efficiency specified by the Commission shall be subject to incentive and penalty framework and that the distribution licensees shall provide a statement to this effect in the mid-year performance review and True-up.
The Distribution licensees as stipulated under Regulation 57.1 (f) of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012 and as per the directive in Commission’s Order on ARR of the two licensees for the control period FY 2014-15 to FY 2016-17 and also in Order on their Annual Performance Review Petition for FY 2014-15 have to submit the computation of supply voltage wise and consumer category wise distribution and AT&C losses. However, in compliance to above, the distribution licensees have submitted the voltage wise losses only. The Commission is of the considered view that a scientific methodology needs to be developed to calculate voltage wise and category wise losses so as the COS of respective category could be calculated precisely.
Accordingly, licensees are directed to finalize the methodology for Cost of supply (CoS) / voltage wise and category wise cost of services and submit the proposal to the Commission for its approval at the earliest without any further delay.
3.7 Distribution Transformers (DTs) failure rate
The HERC vide its Regulation (Standards of Performance for Distribution Licensee) Regulations 2004, has specified the failure rate of distribution transformers as maximum 5% for urban area DTs and maximum 10% for rural area DTs.
In case the maximum permissible failure rate of distribution transformers exceeds the limits specified above, the Return on Equity (RoE) shall be reduced as specified under Regulation 65.1 (ii) of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012.
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The year-wise status of damage rate of distribution transformers, as per the information provided by UHBVNL and DHBVNL is given in the table below:-
Distribution Transformers failure rate
Sr. Year DHBVNL UHBVNL No. Failure Rate Failure Rate Failure Rate Failure Rate including excluding including excluding transformers transformers transformers transformers damaged within damaged within damaged damaged warranty period warranty period within within (%) (%) warranty warranty period (%) period (%) Urban 5.79 4.58 8.95 6.56 1 2009-10 Rural 12.52 9.36 15.84 10.78 Overall 11.74 8.81 15.06 10.30 Urban 7.21 6.09 13.38 9.14 2 2010-11 Rural 12.36 9.46 10.01 6.75 Overall 11.81 9.09 10.29 6.95 Urban 7.21 5.54 10.83 7.76 3 2011-12 Rural 9.98 7.31 10.01 6.38 Overall 9.71 7.14 10.08 6.49 Urban 6.66 5.17 10.83 7.76 4 2012-13 Rural 10.30 7.36 10.01 6.38 Overall 9.94 7.14 10.08 6.49 Urban 8.53 6.50 10.93 7.81 5 2013-14 Rural 10.61 7.14 9.49 6.25 Overall 10.42 7.08 9.60 6.37 Urban 7.15 5.22 9.87 6.31 6 2014-15 Rural 10.53 6.65 9.59 5.63 Overall 10.22 6.52 9.62 5.68 Urban 5.63 3.98 7.18 4.46 7 2015-16 Rural 9.70 6.14 9.3 5.38 Overall 9.32 5.94 9.13 5.38 2016-17 Urban 4.96 3.26 4.62 1.69 8 Rural 10.53 6.67 7.53 3.67 Overall 9.95 6.31 7.27 3.50 9 2017-18 Urban 4.65 3.35 5.28 1.78 Rural 9.41 5.90 6.65 3.19 Overall 8.82 5.58 6.52 3.06
The DT damage rate is to be analyzed on the basis of total number of DTs damaged, irrespective of the fact whether the transformer damaged was within warranty period on not, as all these DTs were part of the system. The Commission considered it appropriate to consider the total damage DT irrespective of damaged within warranty or not. The high level of transformer damage rate not only affect the continuity of supply adversely but also reflects upon poor monitoring and
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 maintenance of distribution system which in turn also impact the finances of the distribution licensees adversely.
The data indicated in the table above shows that in respect of DHBVNL, the DT cumulative damage rate in urban areas during the FY 2015-16 and in rural areas during the FY 2016-17 is 5.63 % & 10.53 % respectively and above the maximum limits prescribed by the Commission. Similarly, in respect of DHBVNL, the DT cumulative damage rate in urban areas during the FY 2015-16 and FY 2017-18 is 7.18 % & 5.28 % respectively and above the limits prescribed by the Commission. Both the distribution licensees have succeeded in reducing the overall damage rate of DT, however marginally, in comparison to previous year. The excess damage rate of DT in urban areas is a matter of serious concern and concrete steps in order to reduce the same.
The Commission also noted it with concern that licensees are not consistent in achieving the damage rate within limits prescribed by the Commission considering the fact that the prescribed limits are far relaxed in comparison of international standards and even standards achieved by Tata Power and other power utilities in India.
The licensees have reported that measures such as routine checking, load balancing, regular checking of oil level, proper earthing of DTs, installation of proper size of fuse at HT and LT side, maintaining of LT lines to ensure proper working of DTs, augmentation of overloaded DTs, mandatory visit to field by senior officers etc. are being taken to reduce the damage rate of DTs. However, in spite of observations of the Commission in its Order dated 01th August, 2016 on APR petition of the licensees for the FY 2015-16 and revised ARR for FY 2016-17, licensees have not examined and reported the cause of damage of DTs in the areas attributing higher damage rate. The Commission again directs the licensees to examine the cause of damage of DTs in the areas where it is above the norms and endeavour to bring down the distribution transformer damage rate below the prescribed limits by ensuring proper maintenance and protection. Further, the reasons for excessive damage of DTs which are in warranty period be examined separately and intimated to the Commission along with the action taken thereof in the matter. Discoms are also directed to submit the year wise details of Power Transformers damaged along with ARR filing.
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As per Regulation 65.1 (iii) of Haryana Electricity Regulatory Commission (Terms and Conditions for Determination of Tariff for Generation, Transmission, Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations 2012, the distribution licensee shall maintain a proper record of failure of the distribution transformers and submit the same in the quarterly report to the Commission. The Discoms are again directed to ensure that quarterly reports be submitted regularly without fail and to host the circle wise information on its website regularly.
3.8 Non replacement of defective energy meters by the distribution licensees
The two companies, in connection with their petition for Annual Performance Review petition for FY 2017-18 (including revised Annual Revenue Requirement for FY 2018-19), have subsequently submitted the following details with regard to defective energy meters. Status of Defective meters
No. of defective meters (ending No. of defective meters (ending March, 2017) March, 2018) Meter category Rural Urban Total Rural Urban Total
In respect to UHBVNL 56523 6861 63384 59167 7495 66662 Single Phase Meters Three Phase Meters 1309 961 2270 1460 619 2079
Total 57832 7822 65654 60627 8114 68741 In respect to DHBVNL
Single Phase Meters 104101 9133 113234 105980 8734 114714
Three Phase Meters 49753 3826 53579 55023 3326 58349
Total 153854 12959 166813 161003 12060 173063
Grand Total 211686 20781 232467 221630 20174 241804
The Commission observes that the total number of defective meters of two licensees have increased to 241804 (ending March, 2018) from the last year figures of 232467 (ending March, 2017) numbers. In respect of UHBVNL these were 68741 and in respect of DHBVNL these were 173063 nos. The latest information shown in the table above indicates that total number of defective meters in the system have increased in both the Discoms instead of going down. This status indicates that the
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 licensees have not made any concrete efforts to clear the backlog of defective meters. This is a matter of great concern and reflects badly on the operations and functioning of the Licensees.
Accurate metering is an important aspect of distribution business as revenue for sale of electricity directly depends upon the bills generated against the metered consumption. It has been pointed out again and again that supply of electricity through defective/dead stop meter for a long time will not only results in harassment to the consumer but also lead to leakage of revenue for the licensees, on account of improper billing and improper measurement of power supplied. Non accounting further results in misuse and wastage of power.
The Commission had been observing the position with concern ever since a long time, but the position did not improve. The Commission, therefore, as per powers conferred to it under Sub-section (3) of Section 55 of the Electricity Act 2003, passed an Order on 10th January 2013, in the matter of non-replacement of defective energy meters by the distribution licensees. Vide this Order, both the distribution licensees were directed to replace all the meters lying defective as on 10th January, 2013 in the Municipal Areas by 30th April, 2013, but the job has not yet been accomplished.
The Commission’s Order dated 07th May, 2015, further assigned the following targets to the licensees for replacement of defective energy meters.
a) Single phase meters : The number of defective energy meters should not exceed 10,000 at any time after December, 2015.
b) Three phase meters : The number of defective energy meters should not exceed 500 at any time after December, 2015.
The licensees vide Commission’s Order dated 07th May, 2015 were also informed that failure to comply with the above targets set by the Commission shall attract the penal provision of Section 142 of the Electricity Act, 2003 against the XEN and above responsible for the lapse. However, both the licensees failed miserably in achieving the targets for replacement of defective meters set by the Commission. The licensees vide Commission’s Order dated 01st August, 2016 were again, directed to submit a detailed report within two months from the date of issue of Order, indicating the detailed reason for not meeting with the targets assigned failure to do so shall attract penal action as per the Electricity Act, 2003. Distribution
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 licensees, however, again failed to keep the defective meters in the system within the specified targets. The Commission observed that sincere efforts are not made instead for replacement of defective energy meters and accordingly in its tariff order date 11.07.2017, as a last chance, directed the distribution licensees to submit a detailed report indicating the detailed reason for not meeting with the targets assigned along with action plan to achieve the targets and failure to do so shall attract penal action as per the Electricity Act, 2003. The licensees were also directed to intimate the average time taken for replacement of defective meter along with area wise and age wise defective meters pending for replacement.
The Licensees in their reply has submitted that the replacement of meter is an ongoing/continuous process and substantial meters have been replaced during the current year as well as in the previous year. UHBVNL in its plan envisaged to replace all single phase and three phase defective and electromechanical meters by the end of FY 2018-19 and FY2019-20 respectively. It has further been assured that the all pending defective meters till date shall be replaced within next six months. DHBVNL has submitted that the initiatives like flagging of the defective meter status in the billing system, Meter Reading Agencies (MRA) at Sub-Division level formulated to keep a track on defective meters within its area and replacement of defective meters in MGJG/feeder sanitisation (LRP) schemes are being taken to meet the targets envisaged by the Commission for replacement of defective meters.
The Commission however is not satisfied with the progress made by both the distribution licenses for replacement of defective meters during year 2016-17 and year 2017-18. The Commission observes that Standard of Performance Regulations notified on 16th July, 2004 provides for normative level of defective energy meter as 1% of total energy meters and the licensees have even failed to achieve the same. The Regulations further provides for replacement of defective meters within 7 days after the same is established defective on checking and delay in doing so attracts penalty of Rs.100 for each day of delay subject to a maximum of Rs 3000/-.
The Commission is of considered view that that sincere efforts has not been made by the distribution licensees for replacement of defective energy meters. The licensees should ensure availability of energy meters at Nigam’s stores, empower its officials and plan its activities suitably in order to achieve the envisaged targets. Accordingly, the licensees are directed to intimate the number of defective electricity meters pending for replacement on the date of issue of this Order
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3.9 Non-replacement of Electro-mechanical meters
Besides the defective energy meters, following Electro-mechanical meters are yet to be replaced by the two distribution licensees.
Details of Electro-mechanical meters yet to be replaced
Electro-mechanical meters in Electro-mechanical in respect Total Electro- Meter category respect of UHBVNL (ending of DHBVNL (ending march, mechanical March, 2018) 2018) meters
Rural Urban Total Rural Urban Total Grand Total
Single Phase Meters 315790 976 316766 242887 23304 266191 582957
Three Phase Meters 0 0 0 33522 2320 35842 35842 Total 315790 976 316766 276409 25624 302033 618799
Total number of Electro-mechanical meters pending for replacement as on September, 2015 as per the ARR Order dated 01.08.2016 were 825978 nos. i.e. 429040 nos. and 396938 nos. with respect of UHBVNL and DHBVNL respectively. It reveals that merely 93951 nos. Electro-mechanical meters were replaced by both the licensees since from October, 2015 to March, 2017.
Section-55 (1) of the Electricity Act, 2003 provides that no licensee shall supply electricity, after the expiry of two years from the appointed date, except through installation of a correct meter in accordance with the regulations to be made in this behalf by the Central Electricity Authority. The Central Electricity Authority vide its Regulations notified on 17th March, 2006 called as the Central Electricity Authority (Installation and Operation of Meters) Regulations, 2006, under Section-4 (1) provides that all interface meters, consumer meters and energy accounting and audit meters shall be of static type. As such by March 2008, the distribution licensees should have replaced all the Electro- mechanical meters with static meters. But even after 9 years of the expiry of appointed date, more than seven (7) lakh Electro- mechanical meters (13% of the total energy meters) are still in use. These Electro-
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 mechanical meters being very old may not be recording energy accurately and may be one of the reasons of under assessment of energy sold.
In Commission’s Order 7th May, 2015 on APR petitions of the licensees for FY 2014-15, the licensees were directed to replace these Electro-mechanical meters by 31st March, 2016 by making all necessary arrangements. Further, not satisfied with the progress reported during the ARR filing of previous year, the Commission vide in its ARR Order for FY 2016- 17 directed the licensees to file, within 3 months, the detailed reasons for not complying with the directive of the Commission.
In this respect, the licensees however, have informed that most of the EM meters are located in rural area where they have to face lot of resistance in replacing the EM meters. DHBVNL in its reply has further emphasised that being located in rural area theses EM meters contributes only 7 - 8% of total revenue and due to practical reasons focus is preliminary on urban areas. But as per reported progress, large numbers of EM meters are still pending for replacement even in urban areas. The Commission, however, is of view that progress of replacement of electromechanical meters can improved significantly by simultaneous execution of same with MGJG and other schemes targeting rural area.
The Commission is not satisfied with the progress and the reasons imparted by the distribution licensees. The Commission, however, feels appropriate to revise the time lines as a last measure and therefore directs the licenses to replace the existing EM meters in following manner:-
1. All the EM meters exist in the urban areas should be replaced by March, 2019.
2. 50 % of EM meters exist in rural areas should be replaced by March, 2019 and remaining by March, 2020. The licensee should endeavour to replace the EM in a systematic manner by taking a specific area/circle at a time.
The distribution licensees are also directed to submit the detailed action plan for replacement of defective meters and electromechanical meters consistent with the time lines set by the Commission in the matter.
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3.10 Procurement of single phase and three phase LT meters.
The Commission observes that the licensees are envisaging installations of smart meters in their specific area of jurisdiction however still procuring normal static meters. The technical specifications for smart meters already stand issued by the Central Electricity Authority. The revised Tariff Policy, 2016 stands issued by the Govt. of India vide Notification dated 28th January, 2016. This Tariff Policy specifies that the Commission shall mandate for smart meters for consumers having monthly consumption above 500 units at the earliest but not later than 31.12.2017 and for consumers having monthly consumption above 200 units by 31.12.2019.
The Commission feels that use of smart meters as envisaged under NTP, 2016 is imperative to avoid human interface in meter reading and has the potential to generate huge information/data which can efficiently be utilized for the system strengthening, theft detection, system planning, best utilization of resources, implementation of DSM schemes etc. The licensees are, therefore, directed to plan their requirement for the smart meters, which can be configured both for pre-paid and post-paid functions, so as the time lines as envisaged under NTP, 2016 for roll out of smart meters across mentioned categories can be met.
The Commission is of the opinion that Smart Metering can resolve several issues. Hence the Commission hereby directs the DISCOMs to implement Smart Metering along with AMI as envisaged under the National Tariff Policy, 2016. This would ensure avoidance of human interface in meter reading and would enable generation of relevant data / information which can be in turn efficiently utilised for system strengthening, theft detection, resolution of billing disputes, system planning, best utilisation of resources, implementation of DSM schemes etc. leading to increased consumer satisfaction.
Accordingly, the Licensees are directed to plan their requirement of smart meters which can be configured for both pre and post paid functions so that time lines envisaged under NTP 2016 for roll out of smart meters across mentioned categories can be met.
Discoms are further directed to finalize the specifications of smart meters in line with functional requirement formulated by CEA and the same along with the list of approved vendors be provided on its website to facilitate consumers to purchase
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 the meter if required. The necessary infrastructure for providing the smart meters in certain category of consumers such as telecom towers, street lighting, bulk supply and temporary connection be also created to plug the revenue leakages due to reading billing disputes.
The Commission is of the view that purchase of static meters be stopped henceforthwith. Any Order, if already given, be cancelled. The healthy static meters dismantled thereof by installing the smart meters can be utilized in the other areas in order to avoid new purchases of static meters.
As pointed out by Hon’ble Chairman in the SAC meeting held on 30.10.2018, in order to ensure proper utilization of the assets (meter), the electronic meters being replaced by the smart meter in urban areas be installed in rural areas, by the same person who is replacing the smart meter, after getting the same checked from the laboratories. No third party be hired for installation of smart meter and replacement of old meter. The Discoms are directed to prepare a comprehensive plan considering the already purchased smart meters/future purchase of smart meters and submit the same within one months from the issue of this order. The Commission has observed that revenue loss is being suffered by DISCOMs due to unmetered supply of electricity and supply of electricity due to defective meters. Accordingly, the replaced meters should be re-installed in a time bound manner not more than two months.
3.11 Pending electricity connection/load
The Discoms, in connection with their petition for Annual Performance Review petition for FY 2017-18 (including revised Annual Revenue Requirement for FY 2018-19), have subsequently submitted information pertaining to connection/load pending for release.
From the data provided by the UHBVNL, the Commission observes that at the end of FY 2017-18 the number of pending applications were 30427 with applied load of 353140 kW. Similarly, in DHBVNL the number of pending application, at the end of FY 2017-18 was 52162 with an applied load of 1064702 kW. Thus, in both the Discoms, the total load pending for release works out to 1368906 kW or 1368.90 MW. The Commission has taken serious note of the fact that on the one hand the Discoms are projecting surplus power during most of the year while on the other
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 hand there are pending applications for release of new connections. Timely release of pending connection could have taken care of the surplus power available to the Discoms to a certain extent, which otherwise is proposed for selling in the inter-State market at 20% below the average cost of power purchase and in turn adding to the financial losses on account of trading of surplus power. The Commission in its previous tariff Order dated 01.08.2016 made it clear that such trading losses shall not be passed on to the electricity consumers of Haryana. The Commission again in its tariff Order dated 11.07.2017 directed the distribution licensees to expedite the release of pending connections/load and to remove the backblock within three months from the date of Order. However, the pendency has increased instead of going down which represents adversely on the working of both the distribution licensees.
The Commission also observed that Discoms are not executing the release of connection to AP consumers under tatkal scheme within the time specified by the Commission even after collecting a premium for early execution of work. The Commission has great sympathy for the farmer community and accordingly in the interest of justice directs the distribution licensees to award compensation as per HERC Regulations wherever the delay in releasing the AP connections under Tatkal Scheme is beyond thirty days. It is directed that pending connections be released within one month, otherwise interest at State Bank of India MCLR rate with one year tenor applicable on 01.04.2018 shall be payable from the date of deposit of tatkal premium amount.
In view of the above, the Commission again directs the distribution licensees to expedite the release of pending applications for new connections as well as load enhancement. The present backlog should be removed within two months from the date of this Order and the distribution licensees shall submit a report on the same thereafter. In case backlog is not cleared within two months, it shall be deemed to be a notice under section 142 against the erring Officer/Official and the penalty so levied shall be paid to the sufferers. The hearing for taking action under Section 142 shall be held in the month of Febuary, 2018. Distributions licensees are directed to submit the circle-wise & age wise pendency of new as well as extension of load cases along with reasons for not expediting the same within the given time frame.
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Compensation paid to the applicants, as specified by the Commission in its Regulations, for delay in expediting new connection or release of extended load shall also informed within two months from the date of this Order. The details of pending connections be uploaded on the website of the DISCOMs on monthly basis along with action plan to release the same.
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Chapter 4
DISTRIBUTION AND RETAIL SUPPLY TARIFF DETERMINATION FOR THE FY 2018-19 4.1 Tariff Proposal filed by the UHBVNL & DHBVNL (Discoms)
UHBVNL, in its present Petition, has submitted that the ARR including revenue gap of FY 2017-18 and the FY 2018-19 have been projected based on actual of the FY 2016-17 at the current level of tariff and FSA. It has been further submitted that the resultant revenue gap with the current level of tariff and FSA shall be met through the Operational Funding Requirement (OFR) as available under UDAY.
4.2 Cost of Service (CoS)
In the absence of a comprehensive consumer category wise CoS filed by the Discoms, the Commission, in line with the APTEL’s judgement dated 30.05.2011 in Appeal No. 102,103 & 112 of 2010 had adopted the methodology suggested by the Hon’ble APTEL in the ibid judgement dated 30.05.2011 for broadly working out voltage wise CoS for the FY 2018-19. However, the amended National Tariff Policy, 2016 has provided for a revised CSS Formula. Hence, the Commission has considered it appropriate to estimate Cross-Subsidy Surcharge in line with the National Tariff Policy, 2016.
4.3 Method to address the Projected Revenue Surplus/ (Gap)
The Commission observes that the revenue at current tariff along with revenue from Interstate sale and subsidy from the State Govt. on current tariff for AP Sales is slightly higher than the total ARR for the the FY 2018-19. However, there are certain gaps in the calculation of ARR e.g. OFR funding as also non inclusion of power purchase cost from a few hydro sources for which source has been approved but PPA and tariff is still to be approved / determined which may result in additional FSA requirement as the year progresses.
Additionally, the Commission, as previously mentioned, has allowed RoE to the Discoms in the FY 2018-19 at the same rate as allowed to HPGCL and HVPNL. Consequently, RoE amounting to Rs. 394.84 Crore for both the Discoms shall be
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19 recovered as part of ARR for the FY 2018-19. While doing so the Commission has ensured that the revised tariff remains within +/- 20% of the average cost of supply as per the National Tariff Policy.
The revised tariff shall be as under. Additionally, the Commission has retained the Time of Use Tariff, as per its earlier Order dated 11.07.2017.
Sr. Tariff for 2017-18 (W.E.F 01.07.2017) Tariff for 2018-19 (W.E.F. 01.11.2018) No. Category of Energy Fixed Charge MMC (Rs. per Category of Energy Fixed Charge MMC (Rs. per consumers Charges (Rs. per kW per kW per consumers Charges (Rs. per kW per kW per (Paisa / month of the month of the (Paisa / month of the month of the kWh or/ connected load / connected kWh or/ connected load connected kVAh) per kVA of load or part kVAh) / per kVA of load or part sanctioned thereof) sanctioned thereof)
contract contract demand (in case demand (in supply is on case supply is HT) or as on HT) or as indicated indicated 1 Domestic Supply Domestic Supply Category I: (Total consumption up to 100 units per month) Category I: (Total consumption up to 100 units per month) 0 - 50 units 270/kWh Nil Rs. 115 up to 0 - 50 units 270/kWh Nil Rs. 115 up to per month 2 kW and Rs. per month 2 kW and Rs. 51-100 450/kWh Nil 70 above 2 51-100 450/kWh Nil 70 above 2 kW kW Category II: (Total consumption more than 100 units/month Category II: (Total consumption more than 100 units/month and up to 800 units/month)) and up to 800 units/month)) 0-150 450/kWh Nil Rs 125 upto 2 0-150 450/kWh Nil Rs 125 upto 2 kW and Rs.75 kW and Rs.75 above 2 kW above 2 kW 151-250 525/kWh Nil 151-250 525/kWh Nil 251-500 630/kWh Nil 251-500 630/kWh Nil 501-800 710/kWh Nil 501-800 710/kWh Nil Category III: Category III: 801 Unit and 710/kWh Nil Rs. 125up to 2 801 Unit and 710/kWh Nil Rs. 125up to 2 above (flat rate kW and above (flat rate kW and no Rs.75 above 2 no Rs.75 above 2 telescopic kW telescopic kW benefits) benefits) 2 Non Domestic Non Domestic (including Independent Hoarding / Decorative Lightning) Upto 5 kW 635/kWh Nil Rs. 235/kW Upto 5 kW 635/kWh Nil Rs. 235/kW (LT) (LT) Above 5 kW 705/kWh Nil Above 5 kW 705/kWh Nil and Up to 20 and Up to 20 kW kW Above 20 kW 660/kVAh 160 / kW Nil Above 20 kW 660/kVAh 160 / kW Nil and upto 50 and upto 50 KW (LT) KW (LT) Existing 695/kVAh 160 / kW Nil Existing 695/kVAh 160 / kW Nil consumers consumers above 50 kW above 50 kW upto 70 kW upto 70 kW (LT) (LT) Consumers 675/kVAh 160 / kW Consumers 675/kVAh 160 / kW above 50 kW above 50 kW (HT) New (HT) New 3 HT Industry (above 50 kW) HT Industry (above 50 kW) Supply at 11 665/kVAh 170/kVA Nil Supply at 11 665/kVAh 170/kVA Nil KV KV Supply at 33 655/kVAh 170/kVA Nil Supply at 33 655/kVAh 170/kVA Nil KV KV Supply at 66 645/kVAh 170/kVA Nil Supply at 66 645/kVAh 170/kVA Nil kV or higher kV or higher Supply at 635/kVAh 170/kVA NIL Supply at 635/kVAh 170/kVA NIL 220 kV 220 kV
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Sr. Tariff for 2017-18 (W.E.F 01.07.2017) Tariff for 2018-19 (W.E.F. 01.11.2018) No. Category of Energy Fixed Charge MMC (Rs. per Category of Energy Fixed Charge MMC (Rs. per consumers Charges (Rs. per kW per kW per consumers Charges (Rs. per kW per kW per (Paisa / month of the month of the (Paisa / month of the month of the kWh or/ connected load / connected kWh or/ connected load connected kVAh) per kVA of load or part kVAh) / per kVA of load or part sanctioned thereof) sanctioned thereof)
contract contract demand (in case demand (in supply is on case supply is HT) or as on HT) or as indicated indicated Supply at 625/kVAh 170/kVA NIL Supply at 625/kVAh 170/kVA NIL 400 kV 400 kV Arc furnaces/ 695 Paisa 190/kVA Nil Arc furnaces/ 695 Paisa 170/kVA Nil Steel Rolling per kVAh Steel Rolling per kVAh Mills also if supply Mills also if supply applicable to is at 11 applicable to is at 11 Open Access kV (See Open Access kV (See note 2 note 2 below) below) 4 LT Industry - upto 50 kW LT Industry - upto 50 kW Upto 10 KW 635/kVAh Nil Rs. 185/kW Upto 10 KW 635/kVAh Nil Rs. 185/kW
Above 10 665/kVAh Nil Rs. 185/kW Above 10 665/kVAh Nil Rs. 185/kW KW & upto KW & upto 20 kW 20 kW Above 20 Nil Above 20 Nil KW and upto Rs 160 on 80% KW and upto 640/kVAh 640/kVAh Rs 160 on 80% 50 KW of CL 50 KW of CL Existing 665/kVAh Rs 160 on 80% Nil Existing 665/kVAh Rs 160 on 80% Nil consumers of CL consumers of CL above 50 kW above 50 kW upto 70 kW upto 70 kW (LT) (LT) 5 Agriculture Tube-well Supply Agriculture Tube-well Supply Metered: 10/kWh Nil Rs. 200 / BHP Metered: 10/kWh Nil Rs. 200 / BHP (i) with motor per year (i) with motor per year upto 15 BHP upto 15 BHP
(ii) with motor 8/kWh Nil (ii) with 8/kWh Nil above 15 motor above BHP 15 BHP Un-metered Nil Rs. 15 / Per BHP Nil Un-metered Nil Rs. 15 / Per Nil (Rs. / Per / Month (Rs. / Per BHP / Month BHP / BHP / Month): Month): (i) with motor (i) with motor upto 15 BHP upto 15 BHP (ii) with motor Nil Rs. 12 / Per BHP Nil (ii) with Nil Rs. 12 / Per Nil above 15 / Month motor above BHP / Month BHP 15 BHP 6 Public 735/kWh 180/kW or BHP Nil Public 735/kWh 180/kW or BHP Nil Water except street Water except street Works / Lift Light Works / Lift Light Irrigtaion / Irrigtaion / MITC / MITC / Street Light Street Light 7 Railway Traction & DMRC Railway Traction & DMRC Supply at 11 655/kVAh 160/kVA Nil Supply at 11 655/kVAh 160/kVA Nil KV KV Supply at 33 645/kVAh 160/kVA Supply at 33 645/kVAh 160/kVA KV KV Supply at 66 635/kVAh 160/kVA Supply at 66 635/kVAh 160/kVA or 132 kV or 132 kV Supply at 625/kVAh 160/kVA Supply at 220 625/kVAh 160/kVA 220 kV kV 8 DMRC DMRC Supply at 66 635/kVAh 160/kVA Supply at 66 625/kVAh 160/kVA kV or 132 kV kV or 132 kV
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Sr. Tariff for 2017-18 (W.E.F 01.07.2017) Tariff for 2018-19 (W.E.F. 01.11.2018) No. Category of Energy Fixed Charge MMC (Rs. per Category of Energy Fixed Charge MMC (Rs. per consumers Charges (Rs. per kW per kW per consumers Charges (Rs. per kW per kW per (Paisa / month of the month of the (Paisa / month of the month of the kWh or/ connected load / connected kWh or/ connected load connected kVAh) per kVA of load or part kVAh) / per kVA of load or part sanctioned thereof) sanctioned thereof)
contract contract demand (in case demand (in supply is on case supply is HT) or as on HT) or as indicated indicated 9 Bulk Supply Bulk Supply Supply at LT 650/kVAh 160/kW or Rs. Nil Supply at LT 650/kVAh 160/kW or Rs. Nil Supply at 11 640/kVAh 160/kVA as Nil Supply at 11 640/kVAh 160/kVA as Nil kV applicable (see kV applicable (see Supply at 33 630/kVAh note 4) Nl Supply at 33 630/kVAh note 4) Nl kV kV Supply at 66 620/kVAh Nil Supply at 66 620/kVAh Nil or 132 kV or 132 kV Supply at 615/kVAh Nil Supply at 615/kVAh Nil 220 kV 220 kV 10 Bulk Supply (Domestic) For total 525 /kWh Rs. 100 /kW of Nil For total 525 /kWh Rs. 100 /kW of Nil consumption the recorded consumption the recorded in a month demand in a month demand not not exceeding exceeding 500 units/ 800 units/ flat/dwelling flat/dwelling unit (DU). unit (DU). For total 620 /kWh Rs. 100 /kW of Nil For total 620/kWh Rs. 100 /kW of Nil consumption the recorded consumption the recorded in a month demand in a month demand exceeding exceeding 500 units/flat/ 800 units/flat/ DU. DU. 11 Independent 854/kWh 180/kW Nil Independent Included in Non Domestic consumer category Hoarding / Hoarding / Decorative Decorative Lightning Lightning 12 Temporary Energy charges 1.5 times the energy charges of Temporary Energy charges 1.5 times the energy charges Metered relevant category for which temporary supply Metered of relevant category for which temporary supply supply has been sought plus fixed charges/ MMC at supply has been sought plus fixed charges/ MMC at normal rates of relevant consumer category. normal rates of relevant consumer category.
Notes:
1. The incentive on installation of rooftop solar system as per HAREDA guidelines, shall be Rs. 1/- per unit only for all DS consumers/Bulk supply (domestic) consumers, installing solar system after the date of this Order. In case the solar system is accompanied by battery storage system of the equivalent capacity, additional incentive of Rs. 1/- per unit shall also be provided, for Bulk Supply (Domestic) consumers only.
2. Energy charges in case of Domestic consumers are telescopic in nature up to the consumption of 800 Units / month. In case of consumption more than 800 units/month, no slab benefit shall be admissible and tariff applicable will be 710 paisa/kWh for total consumption.
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3. In case of Arc furnaces/ Steel Rolling Mills for supply at 33 kV and above, the HT Industrial tariff at the corresponding voltage level shall be applicable.
4. Fixed charges for HT Industrial supply and Bulk Supply category are in Rs./kVA of Contract Demand. For Railways and DMRC, the fixed charges are in Rs./kVA of the billable demand.
5. In case of Bulk Supply Consumers (other than Bulk Supply – DS), the fixed charges are in Rs./kW of the connected load where contract demand is not sanctioned and in Rs./kVA of contract demand where contract demand is sanctioned.
6. 80% of the connected load shall be taken into account for levying fixed charges where leviable in case of LT industrial Supply. In case of LT industry above 20 KW where MDI meter is installed the fixed charges shall be Rs. 160/kw/month of recorded demand if it is in kW or Rs. 144/kva/month of recorded demand if the same in in kVA.
7. Fixed charges for Bulk Supply Domestic are in Rs. / kW of the recorded demand.
8. The above tariff does not include Electricity Duty, Municipal Tax and FSA.
9. The consumers who will deposit advance payment online through RTGS/NEFT in the banks authorized by the Discoms equivalent to 120% of energy charges paid in the previous year, within one month of this Order, shall be given a discount of equivalent to Savings Bank rate till the time entire advance is adjusted.
10. Fixed charges for unmetered AP consumers, MITC and Lift Irrigation category are in Rs. / BHP / month. For MITC and Lift Irrigation, DISCOMs are directed to install smart meter as per CEA norms, within 3 months from the date of this Order. In case the DISCOMs are unable to do so, it may authorize the consumers accordingly, under intimation to the Commission. This exercise be completed within a period of four months from the date of this Order, otherwise tariff equivalent to 3 times of the normal tariff shall be applicable. AP consumption shall also be metered by utilizing the meter replaced by smart meter. It should be ensured that no supply is un-metered.
11. The Commission shall consider granting approval to the Consumers intending to avail supply on Higher Voltage level in case rooftop solar plant is installed by them as per HAREDA norms accompanied by smart meter/smart grid as per CEA
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norms. Such consumers shall give their proposal within five months from the date of this Order.
12. Under Bulk Supply (Domestic) category no benefit of lower slab shall be admissible in the higher consumption slabs. Total consumption shall be charged at a single tariff depending upon the average consumption/flat/residential unit for that month.
13. Bulk Supply Tariff shall be applicable to cremation ground, orphanage, old-age home, kushtrog ashram, working women hostel and E-Vehicle charging station.
14. Certain consumers, during public hearing and other-wise, have expressed the views that sometimes it is difficult to deposit additional consumer security deposit and additional demand charges on enhancement of load. The Commission Orders that in case of enhancement of load where the additional ACD is higher than Rs. 10,000/-, the existing consumer (Panchayat/Nagar Palika/any other social society installing electric crematorium with Smart Meter/Smart Grid as per CEA norms, cremation ground, orphanage, old-age home, kushtrog ashram, working women hostel and E-Vehicle charging station) may be allowed to deposit ACD in 12 equal installments, without payment of any interest. However, facility of depositing additional demand charges/ connection charges in 12 installments along with interest at an appropriate rate not less than 12% p.a., may also be extended to the existing consumers with good payment record. Both the amount as above may form part of energy bills in the next 12 months.
15. In case of single point supply as per HERC (Single Point Supply to Employers’ Colonies, Group Housing Societies and Residential or Commercial cum Residential Complexes of Developers) Regulations, 2013, Bulk Supply (Domestic Supply) tariff shall be applicable. A rebate of 4% in case of supply at 11 kV and 5% in case of supply at higher voltage in the energy consumption as recorded at Single Point Supply meter shall be admissible. NDS load, if any, beyond the prescribed limit as per schedule of tariff, the NDS tariff shall be applicable on monthly consumption corresponding to the NDS load as detailed in the said Regulation. The Bulk Supply (Domestic) Tariff shall apply only to the consumer categories covered by the Single Point Supply Regulations notified by the Commission
16. In addition to the tariff as above, the Discoms shall levy FSA as per HERC (Terms and Conditions for Determination of Tariff for Generation, Transmission,
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Wheeling and Distribution & Retail Supply under Multi Year Tariff Framework) Regulations, 2012.
17. In case of Health and Educational Institutions having a total load exceeding 20 kW, these shall be treated as non–domestic category where the entire load is NDS. However if there is mixed load or there is some other category’s load (other than Industrial) in the total load and if such other load exceeds 10 % of the total load then Bulk Supply tariff shall be applicable. The Commission may consider to cover NDS consumers/Universities/ Educational Institution/Medical colleges/ P.G.I.M.S./Government Hospitals/ Government buildings/Public Health/Water Works/Street Light etc., under Single Point Supply, provided they install Rooftop Solar System as per HAREDA norms accompanied by smart meter/smart grid as per CEA norms.
18. The surcharge of 45 paise/ per unit arc furnace/ steel rolling mills shall also be applicable on Open Access power. However, surcharge of 30 paise per unit shall be levied on Arc furnace/ steel rolling mills installing Rooftop Solar System as per HAREDA norms accompanied by smart meter as per CEA norms.
19. Rebate of 5 paise/kvah shall be allowed to HT/LT consumers having load above 1 MW. Such consumers shall also have to give undertaking to install Rooftop Solar System as per HAREDA norms, Smart Meter/Smart Grid as per CEA norms and shall complete the entire system within seven months of the undertaking.
20. HT/LT consumer opting for suo-moto load enhancement and where load augmentation is not required in the transmission/distribution system, may deposit security deposit in 15 monthly installments, without charging any interest. Service connection charges shall be allowed to be recovered in ten installments with interest rate not less than 12% p.a. Such consumers shall give their proposal within two months from the date of this Order and shall implement the same within seven months of the date of undertaking.
21. Rebate of 5 paise/kvah shall be allowed for Mobile/Telephone towers, installing smart meter as per CEA norms. Further, the rebate shall be increased to 10 paise/kvah in case the smart meter is accompanied by Rooftop Solar System as per HAREDA norms. The concession shall be allowed provided circle-wise single bill is issued to such consumers. Such consumers shall give their proposal within two months from the date of this Order and shall implement the same within seven months of the date of undertaking.
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22. The consumers of all categories may download their bills from Discoms website. The consumers shall be provided bills through SMS alerts and/ or e-mail without any charge, wherever AMR meter reading has been started. Urban domestic consumers above 10 KW, where AMR reading has started, opting for hard copy of the bill shall have to pay Rs. 10/- per bill. All other consumers of the urban area, opting for hard copy of the bill, shall have to pay Rs. 25/- per bill. However, no charges on account of distribution of hard copy of the bill shall be levied on the consumers below 10 KW, AP consumers, BPL consumers and consumers in Rural area.
23. Transaction charges (MDR) for payment through payment gateway on the website of the discoms by way of credit card, debit card, net banking and also the transaction charges for payment through POS machines at the discoms counters and e-wallets etc. shall be borne by the discoms, as per earlier Order.
The consumers of urban areas under Municipal Corporations/Municipal Committee shall pay their bills for amount of Rs. 7000/- and above through above mode of payment including RTGS/NEFT and the banks authorized by the Discoms. Consumers of Urban area with bill amount less than Rs. 7,000/-, shall pay the same only with the bank designated by the DISCOMs for the purpose.
24. In the earlier Order, it was observed that various Government Departments are not able to clear the pending electricity dues of the DISCOMs for want of requisite budget provision. Accordingly, DISCOMs were directed to take up the matter with the State Government to clear pending dues and update the Commission on the progress made. In this regard, DISCOMs have reported that the proposal from Chief Minister for one time surcharge wavier of Government connection has been sent to the Finance Department for making necessary provisions in the budget of defaulting Govt. Departments to clear their outstanding dues. A progress report in this regard, be submitted to the Commission within three months. Further, efforts may be made to get the budget amount transferred directly in the bank account of DISCOMs instead of letting the same paid by the defaulting Government department.
25. With a view to improve the service to the consumers and its business operations in its area of supply, the Discoms were directed to explore the appointment of the Gram Panchayats as retail supply Franchisee in line with the provisions under section 13 of the Electricity Act 2003 whereby the Commission may allow such arrangements on the recommendations of the Government. In such cases the
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energy to such Panchayat Institutions may be made available by the Discoms at a single point (rebate as per Single Point Supply Regulations shall be applicable) at the bulk supply rate. Additionally, Panchayat shall be permitted to install solar system under net metering on the buildings/land and shall be allowed the banking of power as well as the incentive allowed for solar generation at par of that allowed to the DS consumers.
26. In case of new residential housing societies developed, accompanied by Smart Meter & Smart Grid (both at consumer end and at single point supply) as per CEA norms accompanied by Solar System as per HAREDA norms, concession of 5% in the tariff shall be allowed to be distributed equally between the developer and consumers. Further, in case Solar System is accompanied by Battery Storage, the additional concession of 6% shall be allowed. The concession shall be allowed on the variable tariff only mentioned in the tariff schedule.
27. Gaushala organisation/social society accompanied by Smart Meter & Smart Grid as per CEA norms accompanied by Solar System as per HAREDA norms & Biomass/Biogas as per CEA norms, bulk supply tariff shall be applicable. Further, if such organisation has not taken electricity connection, the same shall be allowed shall be allowed to deposit the security in 12 installments. The connection charges may also be deposited in 12 installments after getting the connection, with interest at rate not less than 12% p.a.
Discoms have sought clarification regarding the rates to be applicable for supply of energy in case of such Gram Panchayats/retail supply franchisees.
In this regard, it is clarified that the rate applicable for Bulk Supply (Domestic) shall be applicable, as provided under Single Point Supply Regulations.
Note: No benefit/concession provided in this Order shall be applicable to those consumers whose bill is outstanding for more than two billing cycles.
The Schedule of tariff for supply of electricity by the Discoms shall get modified accordingly.
4.4 Agriculture Pump Set Supply (AP Supply)
For the A.P. consumers, the tariff, in the FY 2017-18 was determined equal to the CoS of L.T. Supply. In line with the previous Order of the Commission the AP tariff determined by the Commission for the FY 2018-19 shall be as under:-
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AP Tariff Determined by the Commission (FY 2018-19) A.P. Metered /unmetered Rs. 7.58/ kWh
As the State Government has been traditionally providing subsidised supply to the AP consumers, the concessional tariff for AP consumers’ category for the FY 2018-19 taking into account the subsidy as estimated by the Commission and payable by the State Government, shall continue at the exiting rates.
As a consequence of retaining the existing subsidised tariff for supply of power to AP consumers, the subsidy payable by the State Government calculated as the difference between the revenue at approved tariff i.e. Rs. 7.58 /kWh which is equivalent to the CoS of L.T. Supply for the FY 2018-19 and the subsidy for the FY 2018-19 shall be as per table below. The same shall be borne by the State Government as subsidy support to the AP consumers and shall be payable to Discoms in accordance with Section 65 of the Electricity Act, 2003 i.e. in advance. The Calculation of Subsidy to be paid by the State Government for the FY 2018-19 as earlier stated is as per table given below.
Calculation for AP subsidy (FY 2018-19)
Subsidy calculation for AP supply unit value 1 Total units supplied to AP MU 9575.00 2 Cost/ Tariff per unit Rs/kWh 7.58 3 Estimated cost of service Rs. Crores 7257.85 4 Revenue at subsidized tariff Rs. Crores 118.13 5 Subsidy required to keep the tariff at current levels = 3-4 Rs. Crores 7139.72 6 Total A.P. Subsidy payable for FY 2018-19 Rs. Crores 7139.72
In the event the State Government does not release the subsidy in accordance with Section 65 of the Electricity Act, 2003 then the Discoms shall demand and collect from the AP consumers tariff as decided by the Commission in this order i.e. equivalent to CoS for AP consumers in FY 2018-19 i.e. Rs.7.58 / kWh converted in to Rs/BHP per month in the case of unmetered supply. The Discoms are directed to take up the issue of any unpaid subsidy vis-a-vis that determined by the Commission in its tariff Order or FSA Order under intimation to the Commission. Additionally, the Commission observes that the Discoms vide Memo No. Ch-05/SE/RA/N/F-25 Vol (72) dated 20.09.2018 has submitted filing for subsidised tariff to certain Domestic Supply (DS) consumers subject to meeting the conditions specified thereto. The subsidy, besides AP
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The Commission reiterates that due to delay in payment of subsidy committed by the State Government as well as poor collection efficiency of revenue billed at the subsidized tariff, the burden in the form of interest on additional working capital requirement is passed on to the other consumers. Hence, the Commission decides that the Discoms shall enforce all the measures including disconnection of AP consumers in case of non payment of bills on the same lines as is done in the case of other consumers. However, if for any policy reasons, the Discoms fail to do so then the cost of such additional working capital shall be borne by the State Government.
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Chapter 5
WHEELING CHARGES AND CROSS-SUBSIDY SURCHARGE 5.1 Wheeling Charges for the FY 2018-19
Segregated accounts including voltage wise assets and losses for the distribution and retail supply business are a pre –requisite for determination of wheeling charges and cross-subsidy surcharge. The Commission observes that the network establishment and operation cost as distinct from retail supply business including the power purchase cost is about 9.32% of the net ARR of the Discoms. Accordingly, the same has been considered by the Commission for working out the wheeling tariff for the FY 2018-19 as under:- Appoved Wheeling Charges for the FY 2018-19 1 Network expenses (per kWh) a. Network establishment and operation cost [9.32% of the net 26059.40 ARR (Rs. 279607.2 Million) ]of the distribution licensees for the FY 2018-19) Rs. Million b. Allowed gross volume of power purchase by the Discoms at 44940.79 State Periphery (MUs) excluding inter-state sales and losses. c. Expenses (Rs / kWh) (a/b) 0.58 2. Cost of losses in the system a Approved Energy available for sale to Discoms (MU) 43835.24 b Distribution system losses (technical) % 5.87% c Losses (MU) (2a X 2b)) 2573.30 d Bulk supply power purchase rate for the Discoms (Rs. / kWh) 4.33 e Total cost of losses (2dx2c) Rs. million 11221 f Cost per unit of losses (Rs. /unit) (2e/1b) 0.25 3. Wheeling Charges (Rs. / kWh) (1c+2f) rounded off 0.83
Accordingly, the wheeling charges payable by the open access consumers, except for the Solar and Wind energy procured from the State of Haryana (which shall be exempted), work out to Rs. 0.83/kWh.
5.2 Cross-Subsidy Surcharge (CSS)
The MYT Regulations, 2012 (regulation 63) provides that the cross-subsidy surcharge shall be payable by all intra-State open access consumers except those persons who have established captive generating station and are availing open access for carrying the electricity to a destination for their own use. Cross-subsidy surcharge shall also be payable by such Open Access consumer who receives supply of electricity
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Section 42 of the Electricity Act, 2003 provides that the surcharge and the cross-subsidies shall be progressively reduced. The Commission has worked out CSS in line with the formula provided in the National Tariff Policy, 2016. The National Tariff Policy dated 28.01.2016 provides as under:-
“SERCs may calculate the cost of supply of electricity by the distribution licensee to consumers of the applicable class as aggregate of (a) per unit weighted average cost of power purchase including meeting the Renewable Purchase Obligation; (b) transmission and distribution losses applicable to the relevant voltage level and commercial losses allowed by the SERC; (c) transmission, distribution and wheeling charges up to the relevant voltage level; and (d) per unit cost of carrying regulatory assets, if applicable”.
The above is subject to the proviso that the surcharge shall not exceed 20% of the tariff applicable to the category of the consumers seeking open access. The Commission has considered the methodology prescribed by the National Tariff Policy dated 28.01.2016, while working out cross-subsidy surcharge in the present Order. The relevant provision of the NTP is reproduced below:- “ Surcharge formula:
S= T – [C/ (1-L/100) + D+ R]
Where
S is the surcharge
T is the tariff payable by the relevant category of consumers, including reflecting the Renewable Purchase Obligation.
C is the per unit weighted average cost of power purchase by the Licensee, including meeting the Renewable Purchase Obligation.
D is the aggregate of transmission, distribution and wheeling charge applicable to the relevant voltage level.
L is the aggregate of transmission, distribution and commercial losses, expressed as a percentage applicable to the relevant voltage level.
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R is the per unit cost of carrying regulatory assets (emphasis added).
Above formula may not work for all distribution licensees, particularly for those having power deficit (emphasis added), the State Regulatory Commissions, while keeping the overall objectives of the Electricity Act in view, may review and vary the same taking into consideration the different circumstances prevailing in the area of distribution licensee. Provided that the surcharge shall not exceed 20% (emphasis added) of the tariff applicable to the category of the consumers seeking open access. Provided further that the Appropriate Commission, in consultation with the Appropriate Government, shall exempt levy of cross subsidy charge on the Railways, as defined in Indian Railways Act, 1989 being a deemed licensee, on electricity purchased for its own consumption. 8.5.2 No surcharge would be required to be paid in terms of sub-section (2) of Section 42 of the Act on the electricity being sold by the generating companies with consent of the competent government under Section 43(A)(1)(c) of the Electricity Act, 1948 (now repealed) and on the electricity being supplied by the distribution licensee on the authorisation by the State Government under Section 27 of the Indian Electricity Act, 1910 (now repealed), till the current validity of such consent or authorisation. 8.5.3 The surcharge may be collected either by the distribution licensee, the transmission licensee, the STU or the CTU, depending on whose facilities are used by the consumer for availing electricity supplies. In all cases the amounts collected from a particular consumer should be given to the distribution licensee in whose area the consumer is located. In case of two licensees supplying in the same area, the licensee from whom the consumer was availing supply shall be paid the amounts collected”.
The Commission has carefully examined the formula for working out cross- subsidy surcharge and observes as under:- The voltage wise technical losses filed by the Discoms and that estimated by the Commission for working out voltage wise CoS is as under:-
Voltage level losses Voltage Levels Discoms Estimates UHBVNL DHBVNL (%) (%) 33 kV line losses 0.50 0.43 33 kV Transformation Losses 0.20 0.19 11 kV line losses 5.63 4.92 11 kV Transformation Losses 1.20 0.92 LT Line Losses 6.62 5.76 Total Losses upto LT Level 13.55 11.12
The Commission observes that above voltage level losses calculated by the Discoms and that of the Commission are marginally different to that estimated by the
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Discoms in the FY 2017-18 and accepted by the Commission for working out voltage wise CoS. As against 13.55 % (UHBVN) total losses upto LT Level now estimated is 13.55% and the same in the case of DHBVN has been now estimated at 11.12% as against 14.68% estimated in the previous year. The Commission, for the purpose of estimating voltage wise CoS has considered the voltage wise losses as estimated by the Discoms for the FY 2018-19.
Based on the voltage-wise loss calculations based on the data submitted by the Discoms, it is possible to work out the total losses up to 11 kV level and overall losses at LT levels. However, working out losses at different HT voltage levels i.e. 66 kV, 132 kV, 220 kV etc. is not possible till such time similar data is made available at these voltages by the Utilities. Hence, for calculating voltage wise losses, the Commission has broadly considered only two categories i.e. HT (11 kV level and above) and LT voltage levels. In line with the National Tariff Policy, the Commission has calculated the voltage wise CoS and Cross Subsidy Surcharge.
Based on the voltage wise technical loss calculations submitted by the Discoms, the technical losses, for UHBVNL and DHBVNL combined, work out to 12.11% at LT voltage level as against 14.22% estimated in the previous year and upstream system and at 5.87% (rounded off) at HT (11 kV and above) voltage level and upstream system as against 8.40% estimated for the previous year. The difference between technical losses so determined and actual total distribution system losses are considered to be on account of reasons other than technical losses and are therefore taken as commercial losses. The commercial losses so determined have been apportioned between HT and LT voltage levels in proportion to annual gross energy sales at these voltage levels. The annual gross energy sales at the given voltage levels has been taken as the sum of energy consumption of all consumer categories connected at that voltage plus the technical distribution losses corresponding to that voltage level as worked out in the voltage wise loss calculations as per the details provided in the table below:-
Calculation of Voltage wise losses for the FY 2018-19 UHBVNL DHBVNL Total 1a HT sales 4417.78 6197.69 10615.47 1b LT sales 10433.42 15500.20 25933.62 1 Total Sales 14851.20 21697.89 36549.09 2 Losses % 2a HT 6.33 5.54
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UHBVNL DHBVNL Total 2b LT 13.55 11.12 3 Loss units 3a HT 298.54 363.49 662.03 3b LT 1635.31 1939.27 3574.58 4 Sales grossed up by Technical losses (1+3) 4a HT 4716.32 6561.18 11277.50 4b LT 12068.73 17439.47 29508.20 5 Combined Technical losses 5a HT 5.87% 5b. LT 12.11% 5 Total 10.39% 6 Total Distribution Losses 3712.80 3573.35 7286.15 7 Total Commercial losses (6-3) 1778.94 1270.60 3049.54 Commercial losses allocated to HT and LT based on 8 grossed up units (4) 8a HT 499.85 347.35 847.20 8b LT 1279.09 923.25 2202.34 9 Total Voltage level distribution losses (3+8) 9a HT 798.40 710.84 1509.24 9b LT 2914.40 2862.52 5776.92 Combined Technical and Commercial losses at 10 Distribution level 10a HT 12.45% 10b LT 18.22% 10 Total 16.62% Units sent out after accounting for Technical and 11 Commercial Losses 11a HT 5216.18 6908.53 12124.71 11b LT 13347.82 18362.72 31710.54 11 Total 18564.00 25271.24 43835.24 12 Transmission Losses Inter state 195.04 265.51 460.55 Intra state 468.19 637.35 1105.54 Total Transmission Losses 663.23 902.86 1566.10 Transmission losses allocated to HT and LT based on 13 grossed up units (4) HT 186.36 246.82 433.18 LT 476.88 656.04 1132.92 14 Total Losses (Transmission and distribution) HT 984.75 957.66 1942.41 LT 3391.28 3518.56 6909.84 Total 4376.03 4476.22 8852.25
15 Total Units purchased incl transmission losses HT 5402.53 7155.35 12557.88 LT 13824.70 19018.76 32843.46 Total 19227.23 26174.11 45401.34 16 Voltage level Total loss percentage HT 18.23% 13.38% 15.47% LT 24.53% 18.50% 21.04% Total 22.76% 17.10% 19.50%
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Accordingly, based on the voltage level distribution losses as worked out above, the calculations for CSS as per National Tariff Policy formula for the FY 2018-19 are as under:-
Calculations of CSS
Cost of Service as per National Tariff Policy
Elements of cost of service
1 Per Unit Weighted average cost of power per unit at State periphery ) (Paise/kWh) 472 Aggregate of transmission, distribution and wheeling charges applicable to the relevant 2 voltage level Intrastate Transmission cost at consumers end (Paise/kWh) ( Transmission and SLDC cost/ sales) ) (Paise/kWh) 49 Distribution (net of power purchase cost) and Wheeling cost at consumers end (4025 X 10/36549) (Paise/kWh) 110 Aggregate of transmission distribution and commercial losses applicable to the relevant 3 voltage level
HT 15.61%
LT 21.17%
Cost of Service
C/(1-L/100)+D+R
HT (Paise / kWh) 718
LT (Paise/kWh) 758
The above loss allocation is reflected in the energy allocators at HT and LT voltage levels i.e. lower cost attributed to the HT consumers and higher cost attributed to the LT Consumers. Thus, the Cost of Service in the case of HT Consumers is comparatively lower than that of the consumers receiving electricity supply at LT voltage. The CSS has been worked out as the difference between the average consumer category-wise average revenue realisation per unit and the voltage-wise CoS of HT or LT as the case may be. The Cross-subsidy surcharge for the FY 2018-19 as per the NTP formula shall be as per the table that follows:-
Cross-subsidy surcharge for FY 2018-19 (Rs/kWh) CoS Average Cross Limited to (Rs./kWh) revenue Subsidy 20% of Tariff realization Surcharge (Rs./kWh) (Rs./kWh)
1 2 3= 2-1 1 HT industry 7.18 7.99 0.81 0.81 2 Bulk Supply (other than DS) 7.18 8.50 1.32 1.32
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CoS Average Cross Limited to (Rs./kWh) revenue Subsidy 20% of Tariff realization Surcharge (Rs./kWh) (Rs./kWh)
1 2 3= 2-1 3 LT Industry 7.58 7.68 0.10 0.10 4 NDS (HT) 7.18 9.00 1.82 1.80
The applicable CSS worked out above is within 20% (+/-) limit in accordance with the National Tariff Policy.
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Chapter 6
Additional Surcharge 6.1 Summary of the petition
In compliance of Section 42 of the Electricity Act 2003 read with Clause No. 22 of Haryana Electricity Regulatory Commission (Terms and conditions for grant of connectivity and open access for intra-State transmission and distribution system) Regulations, 2012, filed the Petition (HERC/PRO-56 of 2017) vide Memo No. Ch- 15/SE/RA/N/F-15/Vol.-X dated 13.07.2017 for additional surcharge to be recovered from Open Access Consumers along with station-wise/source-wise details regarding the quantum of standard power for 2nd half of FY 2016-17 i.e. from October, 2016 to March, 2017. UHBVNL has submitted as under:-
1. Regulation 22 of the "Haryana Electricity Regulatory Commission (Terms and conditions for grant of connectivity and open access for intra-State transmission and distribution system) Regulations, 2012 provides as under:
"Additional Surcharge – (1) An open access consumer, receiving supply of electricity from a person other than the distribution licensee of his area of supply, shall pay to the distribution licensee an additional surcharge in addition to wheeling charges and cross-subsidy surcharge, to meet out the fixed cost of such distribution licensee arising out of his obligation to supply as provided under subsection (4) of Section 42 of the Act.
Provided that such additional surcharge shall not be levied in case open access is provided to a person who has established a captive generation plant for carrying the electricity to the destination of his own use.
(2) This additional surcharge shall become applicable only if the obligation of the licensee in terms of power purchase commitments has been and continues to be stranded or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. However, the fixed costs related to network assets would be recovered through wheeling charges.
(3)The distribution licensee shall submit to the Commission, on six monthly basis the details regarding the quantum of such stranded costs and the period over which these remained stranded and would be stranded. The Commission shall scrutinize the statement of calculation of such stranded fixed costs submitted by the distribution licensee and determine the amount of additional surcharge. Provided that any additional surcharge so determined shall be applicable to all
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the consumers availing open access from the date of determination of same by the Commission.
(4) The consumers located in the area of supply of a distribution licensee but availing open access exclusively on inter-State transmission system shall also pay the additional surcharge.
(5) Additional surcharge determined on per unit basis shall be payable, on monthly basis, by the open access customers based on the actual energy drawn during the month through open access".
2. Since, the Petitioner has a universal obligation to supply power to all the consumers, they have to enter into long term agreements for purchase of power from various generating stations for meeting entire demand of the State. As such, when these Open Access consumers draw power from any other mode under Open Access i.e. through collective transaction or bilateral transaction, the fixed cost of such stranded power is still payable by the Petitioner, while making it a stranded capacity for the petitioner.
3. The Petitioner had filed details of additional surcharge applicable for second half of FY 2015-16 vide memo no Ch-28/GM/ RA/ N/ F-15/ VOL-VIII dated 06.10.2016 with the Commission wherein the applicant, based on the fixed cost paid by them for the stranded capacity due to scheduling of Open Access power by the embedded Open Access consumers in II half of FY 2015-16, had proposed an additional surcharge of Rs. 1.18 per unit to be paid by such consumers.
4. The Commission had uploaded the petition filed by the Discoms on the website of the Commission to enable the stakeholders to submit their comments / objections on the same and after having a public hearing on the same; decided to levy additional surcharge on the energy drawn by open access consumers through open access @ 87 Paisa per unit with effect from the date of notification of the Order dated 14th December 2016.
5. The petitioner has submitted the details of the Additional Surcharge for first half of FY 2016-17 vide memo no Ch-2/GM/RA/N/F15/ VOL-IX dated 24.01.2017 to be recovered from open access consumers seeking approval of the Commission wherein Nigam determined Rs 1.09 per unit as Additional Surcharge to be levied
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on Open Access Consumption and upon which the Order of the Commission is awaited.
6. Similarly, the Petitioner is submitting the details of Additional Surcharge applicable at the rate of Rs 1.29 per unit for second half of FY 2016-17 to be recovered from open access consumers for approval of the Commission.
7. In accordance with the Haryana Electricity Regulatory Commission (Terms and Conditions for grant of connectivity and open access for intra-State transmission and distribution system) Regulations, 2012, the calculation of additional surcharge based on 100% data of all days in second half of FY 2016-17 i.e. October-16 to March-17 have been submitted.
8. The methodology for computation of Additional Surcharge is explained below:-
i) In order to ensure that only such power surrendered is taken for calculating additional surcharge, which corresponds to power stranded because of open access consumers, the lower quantum of open access power per slot and surrendered power for corresponding slot is taken as quantum of the stranded power for slot due to open access.
ii) The Discoms have calculated slot wise stranded power due to open access and total open access power availed in that particular time slot.
a. Based on slot-wise quantum eligible for calculation of Additional Surcharge and slot wise total open access power availed, the corresponding slot wise units have been calculated for all the days in Second half of FY 2016-17.
b. The petitioner further has calculated total units (MU), which corresponds to the stranded power due to Open Access and total Open Access units availed for the second half of FY 2016-17.
iii) Subsequently, the total Additional Surcharge for Second half of FY 2016- 17 is calculated by multiplying the Units evaluated above with the per unit effective fixed charge as calculated below:-
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Source Estimated Units in MU Annual Fixed Charges Rs. Mn. Singrauli STPS 1,482.38 729.52 Rihand I 450.37 347.06 Rihand II 437.50 365.05 Rihand III 398.90 500.73 Unchhahar I 39.11 57.18 Unchhahar II 86.29 138.09 Unchhahar III 47.49 111.75 Anta CCPP 60.34 120.13 Auraiya CCPP 98.03 146.41 Dadri CCPP 99.70 157.47 Faridabad CCPP 770.00 1,937.26 Farakka STPS 86.91 14.95 Kahalgaon I 108.71 159.50 Kahalgaon II 331.07 551.64 Kol Dam 141.47 435.34 Salal I 425.28 303.38 Bairasiul 191.32 227.88 Tanakpur 25.09 38.54 Chamera I 330.36 340.20 Chamera II 71.63 134.81 Chamera-III 80.08 241.28 Dhauliganga 54.72 100.07 Dulhasti 102.93 367.79 Uri 131.03 142.90 Uri-II 53.39 127.01 Sewa II 26.41 83.04 Parbati-III 58.84 165.94 SJVNL 286.40 484.32 Rampur HEP 270.63 148.08 Tehri (THDC) 205.25 649.62 Koteshwar HEP 49.18 98.10 HPGCL 17,252.66 17,938.35 DVC Mejia-B 491.45 1,121.46 Koderma DVC 329.38 584.88 CGPL, Mundra 2,503.22 2,409.53 Sasan UMPP 3,278.25 508.52 PTC GMR 1,692.00 1,326.61 IGSTPP, Jhajjar 1,116.12 8,105.17 MGSTPS,CLP,Jhajjar 4,803.43 8,384.27 Total 38,467.32 49,803.83 Average Fixed 1.29 Charge in Rs per Unit
Finally, the Per Unit Additional Surcharge is determined by dividing the total additional surcharge with the estimated Open Access Units for second half of
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FY 2017-18 (considering same open access scenario as in Second half of FY 2016-17).
The Petitioner has submitted that the details of the backing down owing to Open Access in MW and MU for calculation of additional surcharges and Open Access availed is given in the table below:-
Months Average Quantum Total Quantum to be Average Total to be considered considered for Quantum of Quantum of for Additional Additional Surcharge Open Access in Open Access Surcharge in MW in MU MW in MU Oct-16 320.68 238.58 320.68 238.58 Nov-16 335.97 241.90 335.97 241.90 Dec-16 288.52 214.66 288.53 214.66 Jan-17 294.13 218.84 294.13 218.84 Feb-17 298.64 200.68 298.64 200.68 Mar-17 327.46 243.63 327.46 243.63 Grand Total 310.97 1358.30 310.97 1358.30
9. UHBVNL, has further submitted the total additional surcharge of Rs. 1.29/unit may be allowed to be levied upon open access consumers, which has been calculated based on details of slot wise surrendered power and slot wise open access power considering data of all days of 2nd half of FY 2016-17, as detailed below:-
Total Units of Power in MUs to be considered for Additional in MU 1,358.30 Surcharge Effective Approved Fixed Cost considered for the purpose of Rs/ Unit 1.29 Evaluating Additional Surcharge Total Additional Surcharge for the 2nd half of FY 2016-17 in Rs. In Rs Crore 1,758.60 Crores Open Access Units estimated for the 2nd half of FY 2017-18 in MU 1,358.30 (considering same open access scenario as in 2nd half of FY 2016-17) in Mus Per Unit Additional Surcharge applicable on the same Rs/ Unit 1.29 Quantum of Open Access (Rs./unit)
10. The Petitioner has requested the Commission to allow additional surcharge at a rate of Rs 1.29 per unit to be levied on open access consumers which has been calculated based on details of slot wise surrendered power and slot wise open access power considering data of all days of Second half of FY 2016-17 i.e. October'16 to March'17. UHBVNL has also filed another Petition (HERC/PRO-29 of 2018) vide Memo No. Ch- 08/SE/RA/N/F-15/Vol.-XII dated 11.06.2018 for additional surcharge to be recovered from Open Access Consumers along with station-wise/source-wise
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additional surcharge with the estimated Open Access Units for first half of FY
2018-19 considering that open access scenario will remain same in the first half
of FY 2018-19 as in Second half of FY 2017-18.
1) The Petitioner has further submitted that the details of the backing down owing to
Open Access in MW and MU for calculation of additional surcharges and Open
Access availed is given in the table below:-
Months Average Quantum of Total Quantum of power Average Total Quantum power surrendered on surrendered on account Quantum of of energy drawn account of O.A. to be of O.A. to be considered power drawn through Open considered for Additional for Additional Surcharge through Open Access in MU Surcharge in MW in MUs Access in MW Oct-17 16.38 12.19 16.99 12.64 Nov-17 38.21 27.51 42.01 30.24 Dec-17 78.58 58.47 84.36 62.76 Jan-18 85.47 63.59 89.52 66.60 Feb-18 69.44 46.67 74.32 49.94 Mar-18 8.54 6.35 14.50 10.79 Grand 49.17 214.77 53.34 232.98 Total
2) A summary of total amount of additional surcharge and per unit additional surcharge to be recovered which may be allowed to the Petitioners is summarized below: Particulars Units Amount Total Units of Power to be considered for Additional Surcharge MU 214.77 Effective Approved Fixed Cost considered for Evaluating Additional Surcharge Rs/ Unit 1.21
Total Additional Surcharge for the second half of FY 2017-18 Rs Million 260.93 Open Access Units estimated for 1st half of FY 2018-19 (considering same MU 232.98 open access scenario as in FY 2017-18) Per Unit Additional Surcharge applicable on the same Quantum of Open Rs/ Unit 1.12 Access
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Accordingly, UHBVNL has requested the Commission to allow levy of additional surcharge at a rate of Rs 1.12 per on open access consumers.
6.2 Public Hearing
In Order to afford an opportunity of presenting their views in the matter, the Commission held a public hearing on 16.11.2017 (Petition no. HERC/PRO-56 of 2017) and also along with APR/ ARR/Tariff petitions of UHBVNL. The Objectors / Interveners argued at length that the DISCOMs on the one side are entering into new PPAs for procurement of power citing shortage and on the other hand are levying additional surcharge citing that the power gets stranded due to the Open Access Consumers. It has been further argued that the DISCOMs are recovering fixed costs as part of tariff also and the same also forms part of FSA. Therefore, same charge of fixed cost is being levied thrice on the consumers.
1. After hearing the parties at length, the Commission directed the Petitioner to provide the followings details:-
a) Details of short-term power purchase, if any, during the FY 2016-17 and FY 2017-18 till date.
b) The reason for increase in the stranded power volume in the data submitted for the 2nd half of the FY 2016-17 as compared to the corresponding data for the FY 2015-16.
c) Justification for proposing additional surcharge on account of stranded PPA during peak periods when DISCOMs are imposing restrictions on drawn by charging PLEC.
d) Reply to the comments/objections filed by the interveners. 2. UHBVNL submitted its reply vide memo no. Ch-10/SE/RA/N/F-15/Vol-(12) dated 09.07.2018, on the observations of the Commission contained in the Interim Order dated 23.11.2017 as well as in the letter no. 3720/HERC/Tariff dated 18.01.2018. UHBVNL has submitted as under:-
S.N Observation Reply 1. Details of short-term The detail of short term power purchase is as under:- power purchase, if any, FY Quantum Amount Rate Source during the FY 2016-17 (in LUs) (in Rs.) and FY 2017-18 till date. 2016-17 1.93 370976 1.92 TATA/IEX 2017-18 (upto 134.66 50056580 3.72 Mani Dec’17) Karan/IEX
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2. The reason for increase The data of stranded power for 2nd half of FY 2016-17 includes the in the stranded power quantum of power added in the stranded power quantum, from the volume in the data generating units which were lying boxed up (off-bar) due to less submitted for the 2nd demand whereas the corresponding data for FY 2015-16 did not half of the FY 2016-17 include the same. The same was done on the verbal directions of as compared to the Consultant/Technical, HERC. corresponding data for the FY 2015-16. 3. Justification for The levy of Peak Load Exemption Charges has been provided by proposing additional an amendment on Open Access Regulations on 3rd December surcharge on account of 2013. Regulation 2.3 of the Open Access provides for Levy of Peak stranded PPA during Load Exemption Charges (hereinafter referred to as “PLEC” for peak periods when sake of brevity) on energy drawn through open access during peak DISCOMs are imposing load hours (PLHs). In the said Regulations, the HERC stated that restrictions on drawn by reasons for imposition of peak load restrictions are primarily non charging PLEC. availability of sufficient power during peak load hours as well as system constraints because if unhindered drawl is resorted to by consumers during PLHs, the stability of the entire grid may be in jeopardy and it may lead to collapse of the system. Accordingly, PLEC is levied keeping in view these two factors i.e. to compensate the licensee for scheduling costlier power during PLHs and secondly to contain the demand within available peak capacity. Further, as the Open Access consumers purchase power through energy exchange or through bilateral arrangement, they only contribute to loading of the system and don’t necessitates buying costlier power, only Rs 0.50 per unit is charged as PLEC charges against Rs 1.00 per unit is charged as PLEC charges for energy drawn equivalent to demand between 20% of CD to 50% of CD. However, The PLEC charges charged on energy drawn equivalent to demand above 50% of CD during peak hours is wholly contributable to system constraint and therefore 100% of charges are recovered from Open Access consumers. It is also pertinent to mention that for energy drawn equivalent to 20% of the CD during peak load hours, no PLEC charges are levied. Further, the Additional Surcharge is calculated in such a way that the fixed cost of backed down power is recovered from Open Access consumers. In case, the same is reduced from the total open Access Units, it will lead to increase in per unit Additional surcharges recoverable from the Open Access Consumers. In view of the arguments given above, it can be concluded that the even the licensee is forced to back down the generating stations still the power drawn by open access contributes in the system load and therefore, PLEC charges should be recovered from Open Access consumers. Therefore, the aforementioned two charges i.e. Additional Surcharge and PLEC surcharges are levied for two different purpose which doesn’t overlap with each other. 4. Reply to the Reply placed at Annexure-A. comments/objections filed by the interveners.
3. Objection filed by Jindal Stainless Hisar Limited on the petition filed by the Discoms for the determination of Additional Surcharge to be levied upon the Open Access Consumers:-
1. The Haryana State Discoms i.e. UHBVNL and DHBVNL have jointly filed a Petition before Hon’ble Haryana Electricity Regulatory Commission (hereinafter referred to as State Commission) for approval of Additional Surcharge in
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reference to the Open Access for Second Half of FY 2016-17 to be recovered during FY 2017-18. While doing so, the Petitioners have relied solely upon the provisions under Regulation 22 of the HERC Open Access Regulations, 2012 in isolation of other relevant provisions under the Act and Policies. 2. The facility of open access was one of the major policy shift introduced through the Act. The Petitioners were well aware about this provision since the year 2003 and have past experience of the quantum of energy purchased by the industrial consumers through open access. It is not a new parameter for the Petitioners and hence they ought to have taken due cognizance of this apparent reality while planning the procurement of power. Even otherwise the impact is covered through the recovery from consumers by way of fixed charges or demand charges. Hence the proposal submitted by the Petitioners is nothing but a fallacy to hide their own inefficiency. 3. The Petitioners are in the business/trade of electricity and as such like every trader/businessman they have to take the business risk annexed with the type of business being carried out instead of un-necessarily penalizing the consumers who opt to purchase power from a source other than the Petitioners. 4. The Tariff Policy notified by the Government of India in January 2006 and as modified in January 2016 clearly mentions the intent of the legislatures and some of the important provisions are as follows, 4.0 Objectives of the Policy: ‘Ensure availability of electricity to consumers at reasonable and competitive rates, and Promote competition, efficiency in operations and improvement in quality of supply’. 6.1 Procurement of power As stipulated in para 5.1, power procurement for future requirements should be through a transparent competitive bidding mechanism using the guidelines issued by the Central Government from time to time. These guidelines provide for procurement of electricity separately for base load requirements and for peak load requirements. This would facilitate setting up of generation capacities specifically for meeting such requirements. However, some of the competitively bid projects as per the guidelines dated 19th January, 2005 have experienced difficulties in getting the required quantity of coal from Coal India Limited (CIL). In case of reduced quantity of domestic coal supplied by CIL, vis-à-vis the assured quantity or quantity indicated in Letter of Assurance/ FSA the cost of imported/market based e-auction coal procured for making up the shortfall, shall be considered for being made a pass through by
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Appropriate Commission on a case to case basis, as per advisory issued by Ministry of Power vide OM No. FU-12/2011-IPC (Vol-III) dated 31.7.2013. 8.0 ‘Distribution’ “Supply of reliable and quality power of specified standards in an efficient manner and at reasonable rates is one of the main objectives of the National Electricity Policy. A suitable transition framework could be provided for the licensees to reach the desired levels of service as quickly as possible. Penalties may be imposed in accordance with section 57 of the Act for failure to meet the standards. Therefore, the Regulatory Commissions need to strike the right balance between the requirements of the commercial viability of distribution licensees and consumer interests.” 8.5 Cross-subsidy surcharge and additional surcharge for open access 8.5.1 National Electricity Policy lays down that the amount of cross- subsidy surcharge and the additional surcharge to be levied from consumers who are permitted open access should not be so onerous that it eliminates competition which is intended to be fostered in generation and supply of power directly to the consumers through open access. A consumer who is permitted open access will have to make payment to the generator, the transmission licensee whose transmission systems are used, distribution utility for the wheeling charges and, in addition, the cross subsidy surcharge. The computation of cross subsidy surcharge, therefore, needs to be done in a manner that while it compensates the distribution licensee, it does not constrain introduction of competition through open access. A consumer would avail of open access only if the payment of all the charges leads to a benefit to him. While the interest of distribution licensee needs to be protected it would be essential that this provision of the Act, which requires the open access to be introduced in a time-bound manner, is used to bring about competition in the larger interest of consumers. SERCs may calculate the cost of supply of electricity by the distribution licensee to consumers of the applicable class as aggregate of (a) per unit weighted average cost of power purchase including meeting the Renewable Purchase Obligation; (b) transmission and distribution losses applicable to the relevant voltage level and commercial losses allowed by the SERC; (c) transmission, distribution and wheeling charges up to the relevant voltage level; and (d) per unit cost of carrying regulatory assets, if applicable. Provided that the surcharge shall not exceed 20% of the tariff applicable to the category of the consumers seeking open access.
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8.5.4 The additional surcharge for obligation to supply as per section 42(4) of the Act should become applicable only if it is conclusively demonstrated that the obligation of a licensee, in terms of existing power purchase commitments, has been and continues to be stranded, or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. The fixed costs related to network assets would be recovered through wheeling charges.
5. A mere reading of these extracts from the Tariff Policy makes it amply clear that the Union Government’s attempt to introduce open access in the transmission and distribution systems of the licensees was basically to create competition in the power distribution business and primarily in the larger interest of the consumers. The Policy clearly lays down that the impact of cross subsidy surcharge, additional surcharge and wheeling charges etc. should not be so onerous that it eliminates competition. Further the Policy envisages a scenario where every electricity consumer pays for the cost of service or cost to serve to the distribution licensee. With this intention only it was specifically provided that the cross subsidy surcharge shall not exceed 20% of the tariff applicable to the category of the consumers seeking open access. 6. That the Hon’ble Commission while approving the ARR and Retail Tariff of the Distribution Licensees amply takes into account all the factors as provided for in the Electricity Act 2003, the National Tariff Policy of 2006, and other Regulations framed for the purpose. The financial position of the licensees, their performance/adherence to the requirements of the Distribution License granted by the Hon’ble Commission and above all the basic interests of the electricity consumers in the State are kept in view while deciding the ARR & Retail Tariff on year to year basis. 7. While the Hon’ble Commission looks at the financial health and performance of the State Power Utilities, it also takes into consideration the efficiency with which the Licensee discharges its duties. A non-performing Licensee cannot be rewarded for his perpetual and progressive in-efficiencies. While the consumers pay for the genuine charges incurred by the Licensee, which are allowed by the Hon’ble Commission through annual ARR & Retail Tariff orders, it cannot be unduly loaded for the faults or inaction on the part of the Licensee.
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8. Kind reference is invited to Sub-section (4) of Section 42 of the Electricity Act 2003 which deals with the levy of additional surcharge and terms it as a surcharge on the charges of wheeling. It reads as follows, “(4) Where the State Commission permits a consumer or class of consumers to receive supply of electricity from a person other than the distribution licensee of his area of supply, such consumer shall be liable to pay an additional surcharge on the charges of wheeling, as may be specified by the Commission, to meet the fixed cost of such distribution licensee arising out of his obligation to supply.” 9. The provision under S.42(4) of the Electricity Act, 2003 needs to be differentiated with the provision under second Proviso under S.42(2) of the Act, which reads as under, “Provided that such open access shall be allowed on payment of a surcharge in addition to the charges for wheeling as may be determined by the State Commission :” Thus there is distinct difference between the levy/payment of surcharge on open access and that of additional surcharge. While surcharge is to be paid in addition to the wheeling charges, the additional surcharge is a surcharge on wheeling charges. The two provisions are therefore to be seen in right perspective rather than the way it is misinterpreted by the Distribution Licensees. 10. For determination of the Additional Surcharge, there is need to closely examine the provisions under Regulation 22 of Haryana Electricity Regulatory Commission (Terms and conditions for grant of connectivity and open access for intra-State transmission and distribution system) Regulations, 2012,
22. Additional Surcharge: - (1) An open access consumer, receiving supply of electricity from a person other than the distribution licensee of his area of supply, shall pay to the distribution licensee an additional surcharge in addition to wheeling charges and cross-subsidy surcharge, to meet the fixed cost of such distribution licensee arising out of his obligation to supply as provided under sub-section (4) of Section 42 of the Act. Provided that such additional surcharge shall not be levied in case the open access is provided to a person who has established a captive generation plant for carrying the electricity to the destination of his own use. (2) This additional surcharge shall become applicable only if the obligation of the licensee in terms of power purchase commitments has been and continues to be stranded or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a
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contract. However, the fixed costs related to network assets would be recovered through wheeling charges. (3) The distribution licensee shall submit to the Commission, on six monthly basis the details regarding the quantum of such stranded costs and the period over which these remained stranded. The Commission shall scrutinize the statement of calculation of such stranded fixed costs submitted by the distribution licensee and determine the amount of additional surcharge. Provided that any additional surcharge so determined shall be applicable to all the open access customers availing open access from the date of determination of same by the Commission. 11. The above Regulations clearly provide for the following pre-requisites to be fulfilled before levy of additional surcharge, a) If the obligation of the licensee in terms of power purchase commitments has been and continues to be stranded or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. b) The fixed costs related to network assets would be recovered through wheeling charges. c) The distribution licensee shall submit to the Commission, on six monthly basis the details regarding the quantum of such stranded costs and the period over which these remained stranded. d) The Commission shall scrutinize the statement of calculation of such stranded fixed costs submitted by the distribution licensee and determine the amount of additional surcharge. e) Any additional surcharge so determined shall be applicable to all the open access customers availing open access from the date of determination of same by the Commission. 12. In every ARR order, Hon’ble Commission makes specific observations on non- submission of data by the Licensee alongwith ARR submissions. To claim any charges, the licensee has to submit all the details of the causes of such incidence and satisfy the Commission about its submissions. A simple statement that there is an element of Fixed Cost being incurred due to the purchase of power by the consumers from any other person under open access, does not justify the claim. It has to be seen whether the Licensee exercised due diligence while entering into long term power purchase agreements or this situation has arisen due to poor planning of the Licensees. Indiscriminate
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signing of PPAs without linking it with the supporting accurate Demand Forecast and capability of the transmission & distribution system will result in such a dismal condition. Why should the poor consumers be loaded with undue costs because of the inefficiencies and lack of financial control by the Licensees? 13. Another factor which needs to be examined is the quantum of power being purchased by the open access consumers compared to the total power procured by the Licensees. The power being purchased by the open access consumers is not even 2% of the total power sold by the Licensee. Therefore, it is to be examined whether this miniscule percentage can cause major problem for the licensee or there are other serious reasons. The real problem lies definitely somewhere else than the purchase of power by open access consumers. The licensees have to carry out close introspection into their planning and commercial infrastructure rather than to burden the hapless consumersTherefore, major part of the malady is due to improper power purchase planning of the Licensee. 14. There is no justification for the levy of Additional Surcharge on the Open Access consumers in Haryana. It needs to be appreciated that while considering the ARR of the Distribution Licensees Hon’ble Commission takes in to account the combined tariff of various generating stations. The Tariff assumed in the cost of power purchase is the sum total of the ‘Fixed Cost; as well as the ‘Variable Cost’ of energy to be purchased from each of the projects. Thus the fixed cost of the generation projects is already built in the cost of the power purchase allowed from each source. Even if some of the power scheduled to be purchased from these sources remains unutilized, the fixed coat is already accounted for in the tariff computation. 15. The Distribution and Retail Supply Tariff determined by the Hon’ble Commission has two components i.e. ‘Fixed Demand Charges’ and the ‘Energy Charges’. The fixed demand charges so determined do include the fixed charge liability of the distribution licensee. When the Open Access consumer purchase power through source other than the distribution licensee, he continues to pay the total fixed charges according to his sanctioned Contract Demand irrespective of the power being purchased from any external source. Thus the fixed charge component is already recovered from the open access consumers like that of any other consumer.
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16. Moreover, a consumer, other than the open access consumer, is free to draw any quantum of energy within his contracted capacity and he is liable to pay only the fixed demand charges and the energy charges based on his actual consumption. There is no restriction on such consumer to consume any fixed minimum energy from the grid. On the other hand an open access consumer is being discriminated with the other consumers by levy of additional surcharge. They are both similarly placed. In one case, the consumer is free to use any quantum of energy but the open access consumer is being charged extra for his lesser drawl on account of his buying power from any other source. 17. This is similar to a consumer having a captive power plant. In that case also the consumer would draw less power from the grid depending on his own captive consumption. In this case also he pays only the fixed charges and the energy charges as per his actual consumption from the grid. He is not required to pay any additional surcharge although the impact is the same i.e. reduction in the normal drawl from the grid. Therefore, this is also discrimination with the open access consumers.
MULTIPLE CHARGING OF THE COST OF POWER:
18. When we say the power remained stranded, it means the Licensee will have to pay the fixed charges, with restricted use of the capacity and it will add to the cost of power purchase. Thus the Licensee has to be compensated for the extra cost of power purchase.
Recovery of fixed charge component through Fixed Demand Charges:
19. While approving the Annual revenue Requirement (ARR) the Hon’ble Commission takes into account all source of power purchase and the fixed/variable cost to be paid by the Licensee. In the last ARR order dated 17.07.2017, Hon’ble Commission had worked out the average cost of power purchase on Page 183 wherein the following figures are important:- a) Total Fixed Charges allowed for 2017-18 Rs.80,473.02 Mn (37.82%) Total variable charges allowed for 2017-18 Rs.132,320.61 Mn (62.18%) Total Power Purchase cost Rs.212,793.64 Mn Total power purchase allowed 54,700 MUs Average cost of power purchase allowed Rs.3.89/kWh
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Total fixed charge component is 37.82% of the total cost or 147 Ps/unit. b) On Page 186 the average power purchase cost at Haryana boundary is worked out as Rs. 4.13/kWh or in other words the inter-State transmission element is 24 Ps./kWh. c) On Page 198-199 the following figures are worth noting, Power purchase cost including Inter-State and Intra-State transmission charges & SLDC charges is shown as Rs.21,072.44 Crore and total ARR has been worked out as Rs.24,865.27 Crore i.e. 84.75% of the total ARR is the power purchase cost and rest other charges. d) On Page 252 the sale of power amongst LT and HT has been shown as under:- LT sales 25,739.08 MUs (70.38%) HT sales 10,834.33 MUs (29.62%) Total sales 36,573.41 MUs These figures at Discom periphery are:- LT sales 33,644.79 MUs (71.68%) HT sales 13,283.41 MUs (28.32%) Total sales 46,938.20 MUs e) On Page 234, the CoS for LT and HT consumers has been shown as LT consumers Rs.7.25/unit HT consumers Rs.6.91/unit The difference of the two figures i.e. 34 Ps/unit is the intra-State transmission charges and a part of the distribution charges on 11/33 kV consumers. The Commission worked out the intra-State transmission charge as 36 Ps/unit in the HVPN ARR order for 2017-18 dated 30.05.2017. It means that this element of intra-State transmission charges is already built in the above CoS. f) We have to note that LT consumers (which constitute 71.68% of total sale) account for the sales at 400/230 Volts on which no open access is allowed. The HT consumers (which constitute 28.32% of total sale) include sales at 11 kV and 33 kV (both part of distribution system) and consumers on 66 kV & higher voltages some of whom use open access facility. g) On Page 248 Table 5.1 the distribution wheeling charges are worked out as 84 Ps/unit for the consumers availing open access on 11 kV or 33 kV.
The distribution licensee is thus getting the fixed cost of power fully recovered by way of the Fixed Demand Charges.
Recovery of fixed cost of power purchase through True-Up of ARR:
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20. The Licensee further gets compensated for extra power purchase cost being uncontrollable component under the Multi-year Tariff Regulations. while getting the True up of the ARR in next year.
Recovery of fixed cost of power purchase through FSA:
21. Again the Licensee while calculating Fuel Surcharge Adjustment (FSA) recovers the extra cost incidence due to lesser power being drawn from the generating sources or purchase of costlier power due to any consideration including fuel cost escalation, fixed cost component or otherwise. The components accounted for while determining FSA includes the actual quantum of power approved to be purchased from each of the sources and the actual tariff/cost paid for such power. Thus any extra incidence of higher power purchase cost is being passed on to the consumers by way of levy of FSA in any case. 22. There is no substance in the argument that distribution licensee has to surrender power due to more and more consumers opting for open access in the State. If the Petitioners could meet the demand of the consumers by providing power at economical rates, no consumer would opt to go out to buy power from outside sources. This is a pure myth created by the distribution licensees to hide their own inefficiencies. 23. This is a very well known fact that the distribution licensees are not able to assess their long term power requirements properly and have been unmindfully signing PPAs with new generating stations without knowing their load growth. The growth of power evacuation system has lagged far behind which has created a vast gap between the power available to the State and to the ultimate consumers. While scores of new applicants are waiting for years to the get an electric connection or get their loads enhanced, the distribution licensees are not able to wheel the power to the consumer premises due to weak transmission and distribution network. If this is the scenario how the licensee argues that the PPAs are remaining stranded due to open access consumers. 24. The method of ascertaining the veracity of stranded power, the data of past corresponding period needs to be closely examined as per the guidelines contained in the Tariff Policy and the Regulations.
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25. On scrutiny of data submitted by the Petitioners it would be noted that it is based on wide approximations and without any particular sampling format. Main loop holes observed are as under, a) The sampling of data has been done in a haphazard manner i.e. instead of 100% assessment the data has been submitted for a few days in each month, which cannot be taken as the accurate assessment. b) Based on these arbitrary samples, monthly averages have been worked out. When the question comes of charging money it cannot be done on approximations rather it has to be exact. c) Backing down is always not because of the open access consumers but due to power demand going down on account of other reasons such as rains, agriculture requirement, festival/gazetted holidays, etc. Therefore, assuming per day backing down for all the 365 days in a year is totally absurd and not permissible. d) The data submitted by Petitioners should mention slot-wise surrender/backing down of power from different sources on a particular day over 96 time slots. As per the Tariff Policy power should be surrendered in the order of cost of power i.e. the costliest power should be surrendered first and so on so forth. This merit order surrender principle has not been followed by the Petitioners. In addition it does not mention about open access drawl by the Petitioners over IEX and PXIL platforms. It also does not mention about open access used by captive power plants. The Petitioner is forgetting the following important points, (i) Out of the power drawn over IEX and PXIL, there is power purchased by the Licensee also. (ii) Moreover, the power surrendered/backed down is based on what PLF of the specific generating stations. (iii) The Petitioner needs to certify that the backing down was as per their instructions and not a fait accompli. (iv) It has to be certified that the backing down was done on merit order basis and not by pick and chose method. e) Simple arithmetic calculation of backing down is totally un-scientific as it is possible on that day or time the generating station could be generating less
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due to breakdown/planned shutdown. No such contingency has been accounted for. 26. Under the ‘Methodology’ followed for calculation of additional surcharge, it has been mentioned in Para 1.8 (i) the Petitioners have stated that they have adopted the lower quantum of open access power per slot and surrendered power for corresponding slot. The calculations as contained in Table 2 of the Petition are based on the average stranded power round the clock, whereas the power is backed down only during the time slots when it is surplus. Thus the method of converting MWs into MUs is totally incorrect. 27. Moreover, it has to be appreciated that the additional surcharge cannot be entirely attributed to the energy drawn through Open Access as the Petitioners are expected to take into consideration some quantum of power that would be drawn by the Open Access Consumers based on the past trend while undertaking demand assessment and load management. Some reduction is necessary in view of the fact that the Petitioners charge from most of the Open Access consumer a part of the cost of distribution system and cost of distribution losses as wheeling charges. Further the Petitioners also collect, from most Open Access consumers, demand charges on the basis of the connected load / contract demand. Hence some adjustment of the demand charges paid by the Open Access consumers in the stranded fixed cost of the Discoms has necessarily to be made. 28. In this connection we may draw kind attention of the Hon’ble Commission to the latest order passed by HPERC dated 30.10.2017. In this order the following facts have been considered, a) Para 10 of this order on Page 36 reads as under,
The Commission in its order dated 28-10-2016 for determination of the rate of additional surcharge has suggested HPSEBL to submit the proposal based on alternative methodologies used in other states in addition to the same based on the present methodology. HPSEBL in this petition has worked out the rates of additional surcharges based on the methodologies adopted in the states of Gujarat, Punjab and Haryana. These rates of additional surcharges as worked out by HPSEBL has been 0.91/- Rs./kWh, 5.26/- Rs./kWh and 1.17 Rs./kWh based upon Gujarat, Punjab and Haryana methodologies respectively. So, these rates are coming out to be very much on higher sides in comparison to the rates presently prevailing in H.P. The Commission, therefore, feels appropriate in the interest of all stakeholders involved to adopt the same methodology in this order as well which has been adopted in
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our earlier orders for determination of the rate of additional surcharge. The Commission has thus adopted a methodology which, according to it, is not only fair and prudent but also serves the interest of the open access consumers in a better way. b) On Page 40, HPERC has approved an Addl. Surcharge of 51 Ps/unit after giving adjustment of 67.96 Ps/unit as fixed cost already recovered through Demand Charges from HT consumers. . 29. Therefore, the assessment of fixed cost of power remaining stranded has to be critically examined before passing on undue burden on the consumers, who are already reeling under successive tariff hikes and additional burden caused on account of revision of tariff and periodical FSA. 30. Hon’ble Commission may also kindly keep in view its own observations made while determining the Addl. Surcharge for the year 2014-15, wherein the Commission had mentioned as under, The Commission, therefore, after careful consideration of the submissions made in the petition by UHBVNL, replies / comments furnished by various stakeholders in reply to the petition, the comments / submissions by the petitioners and other stakeholders made during the hearing held on 27.05.2014 and the relevant statutory provisions is of the considered view that the additional surcharge cannot be attributed to the entire energy drawn through Open Access as the Discoms are expected to take into consideration some quantum of power that would be drawn by the Open Access Consumers based on the past trend while undertaking demand assessment and load management. The Commission therefore considers it appropriate to pass on 50% of the stranded cost worked out by the Discoms on account of power drawn through Open Access. Such reduction is necessary in view of the fact that the Discoms charges from most of the Open Access consumer a part of the cost of distribution system and cost of 6% losses as wheeling charges. Further the Discoms also collect, from most Open Access consumers, demand charges on the basis of the connected load / contract demand. Hence in the considered view of the Commission some adjustment of the demand charges paid by the Open Access consumers in the stranded fixed cost of the Discoms has to be made.
In view of the above disposition the Commission has now decided to levy additional surcharge on the energy drawn by open access consumers through open access @ 50 Paisa/kWh with effect from the date of this Tariff Order. The additional surcharge shall be levied / recovered by the distribution licensees from open access consumers as provided in regulation 22 of the Haryana Electricity Regulatory Commission (Terms and Conditions for grant of connectivity and
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open access for intra-State transmission and distribution system) Regulations, 2012.
31. The circumstances and the conditions remaining the same as that of the year 2014-15, the Hon’ble Commission may kindly take all these factors in view while approving the Additional Surcharge in for the year 2017-18. 32. In case the facts are viewed in the background of the above Policy Guidelines, the proposal is totally in contradiction of the tenets of Policy Guidelines. For comparison sake, the figures are given hereunder,
Category of consumers taken as Large Industry (11 kV)
Year Base Fixed Wheeling charges Cross Addl. Total open tariff charg Rs./kWh Subsidy Surchar access Rs/kV es Surchar ge charges Ah Rs./k ge Rs./kWh VA Rs..kWh 2013-14 5.30 150 0.17+0.70 0.53 0.00 1.40 2014-15 5.80 150 0.29+0.74 2.02 0.50 3.55 2015-16 6.15 170 0.36+0.85 0.93 0.84 2.96 2016-17 6.15 170 0.33+0.71 1.57 0.87 3.48 2017-18 6.65 170 0.36+0.84 1.63 0.99 3.82
33. The above table would show clearly that the attempt of the Petitioners is nothing but a step towards making the open access totally unviable, which will be against the spirit and provisions of the Electricity Act, 2003 and the Tariff Policy/National Electricity Policy. Open Access should not be made so unattractive that the consumers cannot avail it at all. 34. Hon’ble Commission is requested to balance the interest of all the stakeholders rather than to watch the interest of the Utilities only. In view of the foregoing facts and submissions, it would kindly be appreciated that there is urgent need to reduce the Additional Surcharge for the current year and refund the extra amount already recovered from open access consumers.
Reply filed by UHBVNL:
1. The contents of Paragraph 1 are matters of record and therefore do not merit any reply. 2. The Objections raised by the objector in Paragraph no 2 were raised earlier also and replies to the same have already been given by the Licensee. The Commission has incorporated the replies in the Order dated 16.11.2015. It is
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also pertinent to mention that no new facts or objects have been raised in the said para. Therefore the same is not repeated for sake of brevity. 3. The distribution of electricity is licensed activity. Further, the licensee is required to perform as per the Electricity Act, 2003 and the Regulations made thereunder. The licensee in compliance to the provision of the HERC Open Access Regulation, 2012 has filed the 6 months data before the Commission for determinations of Additional surcharge to be levied on Open Access Consumers. Therefore, the objections made by the Objector are totally vague in nature and there is no merit in the contention of the objector. 4. The contents of Paragraph 4 are matters of record and therefore do not merit any reply. 5. The contents of Paragraph 5 are matters of record and therefore do not merit any reply. 6. It is submitted that the argument of the Objector in paragraph no 6 is totally wrong and denied as the objective of the Electricity Act, 2003 provides for balancing the interest of the power industry as a whole along with safeguarding the interest of the power consumers. The development of the electrical industry and rationalization of the electricity tariff would be possible only if the interests of both the power sector stakeholders and the consumers are simultaneously balanced. Hence, the Commission has not only to monitor performance of power utilities, but while assuring them reasonable returns, has to in unison, act as a custodian of public interest. In other words, the Commission is expected to balance the interests of the various stakeholders and, at the same time grant bare minimum ROE to the Discoms to promote efficiency, economy, and competition in the sector. Further, Hon’ble Supreme Court in judgment dated 25.4.2014 in Civil Appeal No. 5479 of 2013 in the matter of M/s. Sesa Sterlite Ltd. Vs. Orissa Electricity Regulatory Commission & Ors. has held as under: “25. The issue of open access surcharge is very crucial and implementation of the provision of open access depends on judicious determination of surcharge by the State Commissions. There are two aspects to the concept of surcharge – one, the cross subsidy surcharge i.e. the surcharge meant to take care of the requirements of current levels of cross subsidy, and the other, the additional surcharge to meet the fixed cost of the Distribution Licensee arising out of his obligation to supply. The presumption, normally is that generally the bulk consumers would
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avail of open access, who also pay at relatively higher rates. As such, their exit would necessarily have adverse effect on the finances of the existing licensee, primarily on two counts – one, on its ability to cross subsidise the vulnerable sections of society and the other, in terms of recovery of the fixed cost such licensee might have incurred as part of his obligation to supply electricity to that consumer on demand (stranded costs). The mechanism of surcharge is meant to compensate the licensee for both these aspects. 26. Through this provision of open access, the law thus balances the right of the consumers to procure power from a source of his choice and the legitimate claims/interests of the existing licensees. Apart from ensuring freedom to the consumers, the provision of open access is expected to encourage competition amongst the suppliers and also to put pressure on the existing utilities to improve their performance in terms of quality and price of supply so as to ensure that the Appeal No.38 of 2013 Page 28 of 41 consumers do not go out of their fold to get supply from some other source.” In view of the above, it can be concluded that the additional Surcharge is legitimate cost recovered from Open Access consumers. 7. The Argument made by the Object are totally vague in nature and are not based on any facts or data, therefore denied. It is submitted that the Discoms has filed the slot wise data of back down and Open Access Drawal in those slots of six months. The Commission only after prudence check of the same, determines the per unit additional surcharge to be levied on units drawn through Open Access by Open Access Consumers. Therefore, only the legitimate cost i.e. fixed cost of back down units is recovered from the Open Access consumers and no inefficiency is passed on the to them. 8. The contents of Paragraph 8 are matters of record and therefore do not merit any reply. 9. It is submitted that Section 42(4) of the Electricity Act’03 provide for levy of Surcharge on the charges of wheeling. The relevant excerpts of the Electricity Act’ 2003 has been reproduced below: “(4) Where the State Commission permits a consumer or class of consumers to receive supply of electricity from a person other than the distribution licensee of his area of supply, such consumer shall be liable to pay an additional surcharge on the charges of wheeling, as may be specified by the State Commission, to meet the fixed cost of such distribution licensee arising out of his obligation to supply.” As per the proviso 8.5.4 of National Tariff Policy, 2016, the Additional Surcharge has been made obligatory under section 42(4) of the Electricity Act’03.
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The relevant excerpts of the National Tariff Policy 2016 has been reproduced below:- “The additional surcharge for obligation to supply as per section 42(4) of the Act should become applicable only if it is conclusively demonstrated that the obligation of a licensee, in terms of existing power purchase commitments, has been and continues to be stranded, or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. The fixed costs related to network assets would be recovered through wheeling charges.” It can be concluded from bare reading of the above paragraphs that the additional surcharge has been made obligatory under section 42 sub-section 4 of the Electricity Act 2003 and therefore there is no merit in the argument made by the objector. 10. In accordance with the provisions of the Electricity Act 2003, the distribution licensees have an obligation to supply power to all the consumers under the respective areas of supply; and correspondingly they have to enter into agreements for purchase of power from various generating stations for meeting the entire demand of the state, well in advance. As such, when these embedded consumers draw power from elsewhere apart from the licensee under open access, the fixed cost of the supply taken by these consumers from elsewhere is still payable by the licensee, making it a stranded capacity for the distribution licensee. It is submitted that the additional surcharge is payable for the stranded capacity of the distribution licensee. In the event of the open access consumers moving out of the system of the distribution licensee, the distribution licensee has to bear stranding of assets which causes financial loss to the distribution licensees and the same needs to be compensated by way of additional surcharge. It is further submitted that the discoms have considered only that quantum of stranded power which was backed down/surrendered owing to open access consumption in the state. Thus in time slots where the open access consumption was lower than the surrendered power, if such deemed open access consumers would have purchased power from the discoms, the power surrendered would have been lesser. Even in time slots where the open access consumption was higher than the surrendered power, if such deemed open access consumers would have purchased power from the discoms, to the extent of power availability; the additional surcharge would have been nil as there would have been no surrendered power available for that slot.
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Further, the Commission in its Order dated 14.12.2016 has mentioned that the obligation of the distribution licensee(s) to pay fixed cost of power purchase under long term Power Purchase Agreements has been and continues to be stranded. The relevant extract of the Order has been given below: “… it is conclusively established, from the data submitted for the 2nd half of the FY 2015-16 that the obligation of the distribution licensee(s) to pay fixed cost of power purchase under long term Power Purchase Agreements has been and continues to be stranded. Hence, the Commission Orders that the Additional Surcharge in vogue i.e. Rs. 0.87/Unit shall continue to be in effect till such time the same is revised / amended by the Commission.”
As the same methodology is adopted by the Nigam for calculation of addition, it is clear that Discoms have been levying Additional Surcharge in accordance with the Regulations duly approved by the Commission. Therefore, there is no merit in the contention of the objector and denied. 11. The replies to same have been given above therefore not repeated for the sake of brevity. Also, the contents of Paragraph 11 are matters of record and therefore do not merit any reply. 12. It is submitted that the licensee has been procuring power from approved sources only. The fixed cost of power purchase considered for calculation of per unit additional surcharge to be levied upon on the Open Access consumers has been approved by the Commission in the Tariff Order only. Therefore, the argument It is submitted that the power Discoms have signed PPAs to meet the increasing demand of power in the State, which is eight-ten per cent per annum at State level and 15-20 per cent per annum in industrial and commercial circles like Gurgaon and Faridabad, and thus the Haryana Government is regularly making all out efforts to create additional capacity of generation along with the power transmission and distribution system simultaneously being strengthened congruently. All this has helped improve the quality of power and also facilitated the Discoms to meet the rising need for electricity. It may be seen that every year the peak load for the Discoms reaches high levels of around 9000 MW and thus the arrangement of signing power purchase agreements are valid and justified. It is evitable from the fact that the running hours to various consumer categories specially industrial and commercial have improvised at a fast pace.
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In accordance with the provisions of the Electricity Act 2003, the distribution licensees have an obligation to supply power to all the consumers under the respective areas of supply; and correspondingly they have to enter into agreements for purchase of power from various generating stations for meeting the entire demand of the state, well in advance. As such, when these embedded consumers draw power from elsewhere apart from the licensee under open access, the fixed cost of the supply taken by these consumers from elsewhere is still payable by the licensee, making it a stranded capacity for the distribution licensee. Further, these embedded consumers keeps on switching between the licensee and Open Access based on the exchange rates. Therefore, it becomes practically impossible for licensee to have a long term plan considering open access consumers. It is submitted that the additional surcharge is payable for the stranded capacity of the distribution licensee. In the event of the open access consumers moving out of the system of the distribution licensee, the distribution licensee has to bear stranding of assets which causes financial loss to the distribution licensees and the same needs to be compensated by way of additional surcharge, as has been allowed by the HERC. 13. The replies to same have been given above therefore, not repeated for the sake of brevity. 14. It is submitted that the Hon’ble Tribunal vide Judgment in APPEAL NO.294 OF 2013, APPEAL NO.299 OF 2013, APPEAL No.331 OF 2013 AND APPEAL No.333 of 2013 dated 26th Nov, 2014 has given as under:- “42. Having prescribed the formula in the said manner, the tariff policy in order to avoid double recovery of fixed costs has restricted additional surcharge only to recovery of stranded power purchase costs. The relevant extract is as follows: “8.5.4 The additional surcharge for obligation to supply as per Section 42 (4) of the Act should become applicable only if it is conclusively demonstrated that the obligation of a licensee, in terms of existing power purchase commitments, has been and continues to be stranded, or there is an unavoidable obligation and incidence to bear fixed costs consequent to such a contract. The fixed costs related to network assets would be recovered through wheeling charges.”
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43. Fixed costs of the Distribution Licensees other than power purchase are generally included in the Wheeling Charges. The Cross Subsidy Surcharge then computed using the Tariff Policy formulae would not thus include such fixed costs. However, in case, the Wheeling Charges do not contain certain fixed cost of the distribution licensee then the same gets recovered by way of Cross Subsidy Surcharge as in the Tariff Policy Formula. The wheeling charges are to be subtracted from the tariff payable by various categories of consumers which include such fixed costs. The State Commission, in fact adopted the Cross Subsidy Surcharge formula specified in the tariff policy. Therefore, such fixed cost is recovered through Cross Subsidy Surcharges instead of wheeling charges. Since the fixed cost of distribution licensee other than power purchase cost would be recovered by the Distribution Licensee either by way of wheeling charges or Cross Subsidy Surcharges, therefore, as per the tariff policy, the additional surcharge is limited to stranded cost of power purchase only otherwise it would amount to double recovery of fixed cost from the migrating consumers.” Thus, it may be seen that the recovery of fixed charges owing to stranded power because of open access consumption is exclusive of the fixed charges of the discoms included in the wheeling charges. Thus the statement doesn’t hold any merit. It is submitted that the fixed charges included in the approved power purchase cost by the Hon’ble Commission is congruent to the estimated sales and revenue approved to the discoms. Thus in the present case, while the open access consumers are procuring power from some other source other than licensee, the discoms have to back down/surrender additional power (other than the power surrendered because of reasons apart from open access consumption) and thus without procuring such power, the fixed charges are to be paid to the generators. Hence, these fixed charges are paid without any revenue compensation through tariff and thus needs to be allowed as recovery through Additional Surcharge under the legal postulates of the Electricity Act 2003. 15. The replies to same have been given above therefore, not repeated for the sake of brevity.
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16. It is submitted that the Commission is a statutory body created under the Act and the tariff dispensation has been done in accordance with the principles enshrined under the Electricity Act and regulations framed thereto. It is submitted that open access is not an unfettered right and is subject to various terms and conditions provided under the Act and the regulations framed thereto. The grant of open access is the prerogative of the respective SERC under section 42 of the Act and is subject to operational constraints. It is submitted that there is a huge body of jurisprudence with respect to open access issues and the challenge to levy and/or increase of Cross Subsidy Surcharge and Additional Surcharge has already been decided by the Hon’ble Appellate Tribunal in various cases. In fact the levy of Cross Subsidy Surcharge and Additional Surcharge in a mandate which flows from the provisions of the Act, namely section 42 and helps the distribution licensees in performing their public duties by compensating them for the loss of consumers who were of the subsidizing category in order to serve poor consumers. Any loss of Cross Subsidy Surcharge and Additional Surcharge will lead to a rise in general tariff of the other category of consumers. It is submitted that the fixation of retail tariff and other aspects of tariff require a detailed exercise and is done in a manner to not only protect consumers but also tries to ensure rational tariffs in orders to reflect the actual cost of supply. Any unilateral tinkering with the levy of Cross Subsidy Surcharge and Additional Surcharge will result in upsetting the tariff structure within the State of Haryana. 17. It is submitted that Electricity Act’03 and HERC Open Access Regulation, 2012 consumers have exempted Captive Power plants from payment of Additional Surcharge and Cross Subsidy surcharge as they utilize their own generated power and also the licensee can forecast the long term power purchase considering the Captive consumption of such consumers. Therefore, the drawal from Open Access and consumption through Captive power plants is not comparable and hence there is no merit in the contention of the Objector. 18. The contents of Paragraph 1 are matters of record and therefore do not merit any reply. 19. The replies to same have been given above therefore, not repeated for the sake of brevity. 20. It is submitted that the argument of the intervener is conceptually wrong as it is the only cost which after reduction of variable cost of power purchase of
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disallowed is allowed in the Annual Revenue requirement of the Nigam and Revenue from the Additional surcharge is further reduced from the Gross Revenue requirement in the form of Non-Tariff Income. Therefore there is no double accounting of the Additional Surcharge. 21. It is submitted that the FSA is levied only on the units consumed by an Open Access consumer from the licensee and not on the units drawn through Open Access and the fixed costs owing to stranded power is recovered through FSA are recovered through consumers of the discoms. In case the fixed costs owing to stranded power due to open access consumers is legitimately allowed to be recovered from open access consumers through additional surcharge, the same shall definitely not get included in the FSA. 22. It is submitted that the Commission is a statutory body created under the Act and the tariff dispensation has been done in accordance with the principles enshrined under the Electricity Act and regulations framed thereto. It is submitted that open access is not an unfettered right and is subject to various terms and conditions provided under the Act and the regulations framed thereto. The grant of open access is the prerogative of the respective SERC under section 42 of the Act and is subject to operational constraints. It is submitted that there is a huge body of jurisprudence with respect to open access issues and the challenge to levy and/or increase of Cross Subsidy Surcharge and Additional Surcharge has already been decided by the Hon’ble Appellate Tribunal in various cases. In fact the levy of Cross Subsidy Surcharge and Additional Surcharge in a mandate which flows from the provisions of the Act, namely section 42 and helps the distribution licensees in performing their public duties by compensating them for the loss of consumers who were of the subsidizing category in order to serve poor consumers. Any loss of Cross Subsidy Surcharge and Additional Surcharge will lead to a rise in general tariff of the other category of consumers. It is submitted that the fixation of retail tariff and other aspects of tariff require a detailed exercise and is done in a manner to not only protect consumers but also tries to ensure rational tariffs in orders to reflect the actual cost of supply. Any unilateral tinkering with the levy of Cross Subsidy Surcharge and Additional Surcharge will result in upsetting the tariff structure within the State of Haryana.
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23. The argument made by the intervener has no merit and totally vague in nature. Further, they are not based on any facts or data therefore does not merit any reply. 24. It is submitted that the replies to the Objections made in the paragraphs 24 to 34 have already been submitted to the Hon’ble Commission at various instances and the same has also been taken care of by Hon’ble Commission in its order dated 16.11.2015 on Additional Surcharge. As no new argument have been advanced and word by word same objections, which have already been addressed in the aforementioned order, the replies to the same have not been repeated for the sake of brevity.
6.3 Commission’s Analysis & Order
The Commission had advised the DISCOMs to take timely action for submission of supporting data / details for the next six months and also host the same on its website. The said Order also provided that the Additional Surcharge shall continue to be effective till the same is revised / amended by the Commission. Accordingly, the DISCOMs have filed the requisite data. The Commission has taken the figures submitted by the Petitioner vide Petition No. HERC/PRO-29 of 2018, as the base for determining the Additional Surcharge to be effective from the date of this order and examined as under:- a) That the Petitioner has worked out backing down quantum day-wise, slot- wise for the corresponding six months of FY 2017-18, from the implemented schedule and the entitlements as per their last revision, for the particular day. b) That due to the change in the declared capacity of the inter-State generator during the day, the change in entitlement of the State from that particular Generator, is automatically accounted for. c) It has been further observed that the generating units which are not on bar due to less demand have not been considered and only the running units backing down has been considered for arriving at the stranded cost of power for determination of additional surcharge. d) The Commission, while approving Additional Surcharge, has considered fixed cost approved for the FY 2018-19 i.e. Rs. 6765.33 Crore and divided the same by approved volume from all approved sources. Accordingly, the Additional Surcharge had been determined as per the details below:-
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Months MW MU OA (MW) OA (MU) A= Lower of B= A C= Open D= C converted into Open Access converted Access MU and Backing into MU down Oct-17 16.38 12.19 16.99 12.64 Nov-17 38.21 27.51 42.01 30.25 Dec-17 78.58 58.46 84.36 62.76 Jan-18 85.47 63.59 89.52 66.60 Feb-18 69.44 46.66 74.32 49.94 Mar-18 8.54 6.35 14.5 10.79 Total 296.62 214.77 321.70 232.99 Monthly Average 49.44 35.79 53.62 38.83 Quantum considered for Addl. Surcharge (lower of the power MU 35.79 backed down/surrendered and open access power) Per Unit Fixed Cost of Power Purchase for the FY 2018-19 Rs/kWh 1.22 Avg. Additional Surcharge for the FY 2018-19 Rs. Millions 43.82 Monthly Open Access Power MU 38.83 Additional Surcharge (rounded off) Rs/kWh 1.13
The Additional Surcharge of Rs. 1.13/kWh shall be applicable to the consumers of Uttar Haryana Bijli Vitran Nigam (UHBVN) and Dakshin Haryana Bijli Vitran Nigam (DHBVN) (form the date of this Order) who avail power under the Open Access mechanism in terms of Haryana Electricity Regulatory Commission (Terms and Conditions for Grant of Connectivity and Open Access for Intra-State Transmission and Distribution System) Regulations, 2012, from any source other than the distribution licensees. The Commission shall review the issue of calculation of Additional Surcharge upon the receipt of detailed information on the concern raised by the beneficiaries regarding certain reliefs.
Petition Nos HERC/PRO-56 of 2017 and HERC/PRO-29 of 2018 are accordingly disposed of.
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Chapter 7
Time of Use Tariff / Time of Day (ToD) Optional
The Commission had introduced the following Time of Use Tariff/Time of Day (ToD) tariff in its ARR Order dated 11.07.2017, as an option.
Charge Time 10 % rebate on the normal energy Off-Peak (October to From 10 P.M to 05.30 charges as approved by the March) A.M Commission.
Peak (October to 19% premium over the energy charges From 06.30 P.M hours to March) determined by the Commission up to 10.00 P.M
Normal demand From 05.30 A.M to Hours (October to Normal Tariff 06.30 P.M March)
As determined by the Commission - shall be the same for all Demand Charges categories of consumers including ToU. PLEC shall continue to be applicable for Open Access Power.
Subsequently, the following petitions were also filed by UHBVNL:
1) Petition for Concessional tariff to HT Industrial Consumers for power drawn by them during off-peak hours in excess of their normal consumption during the corresponding billing period in the preceding year from October 2017 to March 2018.(PRO-65 of 2017)
2) Petition for extending rebate of maximum 15% on the normal energy charges to all categories of consumers in the Panipat Smart City area of consumption of energy during off-peak hours. (PRO-17 of 2018).
In the petition seeking Concessional tariff to HT Industrial Consumers for power drawn by them during off-peak hours in excess of their normal consumption during the corresponding billing period in the preceding year from October 2017 to March 2018 (PRO-65 of 2017), UHBVNL vide memo no. Ch.3/SE/RA/N/F-56/Vol-15 dated 31.08.2017, UHBVNL has been submitted as under:-
1. That the Commission vide its Order dated 07th May, 2015 had directed the Discoms to examine the feasibility of extending supply to the HT Industrial Consumers at a concessional rate for power drawn by them during off-peak hours in excess of their normal consumption during the corresponding billing period in the preceding year.
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2. Accordingly, UHBVNL filed the Petition (PRO- 42 of 2016) for providing energy at concessional rate to HT Industrial Consumers during night hours in line with the directions of the Commission. In the said Petition, the feasibility of extending supply to the HT Industrial Consumers at a concessional rate for power drawn during night hours (22:00 Hrs to 04:00 Hrs) in excess of normal consumptions during the corresponding billing period in the preceding year was examined and it was proposed that a concessional rate of Rs 6 per unit (Inclusive of FSA, ED and M.Tax.) for power drawn during night hours (22:00 Hrs to 04:00 Hrs) in excess of normal consumption may be offered to the HT Industrial Consumers. Further in order to prevent loss of revenue to the Nigam due to shifting of HT Industrial Consumers from day to night hours (22:00 Hrs to 04:00 Hrs) without increase in their overall consumption, it was provided that only the additional consumption over and above the consumption during the corresponding billing period of the previous year would be eligible for rebate and the same would be equal to
lesser of , where
x=Cumulative change in consumption during night hours (22:00 Hrs to 04:00
Hrs) over the entire billing cycle.
y=Cumulative change in total consumption during00:00 to 24:00 hours over
the entire billing cycle. It was further provided that as the base consumption for working out the change in consumption may depend on many factors like seasonality, load growth etc., the same would be decided on case to case basis by the Nigam and that the rebate would be limited to additional consumption to be calculated as above, over and above the base consumption so decided. It was also proposed that the concessional rate of Rs. 6/- per unit as proposed maybe allowed for HT Industrial Consumers on pilot basis from January 2017 to March 2017.
3. The petitioner has further submitted that the Proposal for concessional tariff for the HT Industrial Consumers and approved vide Order dated 13.01.2017, as under:-
The concessional rate of Rs. 6.0/kWh shall be applicable for incremental consumption during night hours i.e. from 22:00 Hrs to 04:00 Hrs only worked out as per the proposed methodology. A HT consumer whose total consumption during the month say December 2016 is 3506578 kWh and his consumption during the corresponding month of the previous year i.e. December 2015 was 2658844 kWh.
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His incremental consumption shall be 847734 (3506578-2658844). Further, the total electricity consumption of this consumer during the concessional tariff period i.e. 2200 Hrs to 0400 Hrs in December 2016 happens to be 2699012 kWh as against 2013456 kWh during the corresponding month and period of the previous year i.e. December, 2015, the incremental consumption in this case is 686556 kWh (2699012-2013456). Thus, in this hypothetical case, the minimum incremental consumption (additional consumption) is the latter figure i.e. 686556 kWh which shall qualify to be billed at the concessional tariff of Rs. 6.0/kWh. The balance electricity consumption shall be billed as per the tariff and charges in vogue. The HT Industrial consumer, desirous of availing concessional tariff as per the terms and conditions proposed by the Discoms, shall submit his application to the Chief Engineer / Commercial of UHBVN. The committee headed by Chief Engineer / Commercial UHBVN and comprising of CFO / UHBVN, SE HPPC / SO, SE / Metering & Protection and Senior AO / HPPC, shall preferably, clear the application within the same day. However, the decision shall in no case be delayed beyond three days from the date of receipt of the application. The concessional tariff shall terminate w.e.f 31st March, 2017. The change in sales / consumption / load data / open access quantum and revenue thereto emanating from introduction of concessional tariff, on a pilot basis, vis-à-vis the baseline data, shall be meticulously collected and submitted to the Commission.
4. The Petitioner has submitted that in compliance of the Commission Order dated 13.01.2017, Sales Circular U-4/2017 dated 18.01.2017 and D-6/2017 dated 19.03.2017 were issued by UHBVN and DHBVN respectively for implementation of the proposal. The scheme remained in operation upto 31-03-2017 in line with the Order of the Commission. During this period applications from 21 Nos of HT Industrial Consumers of UHBVN and 11 Nos of HT Industrial Consumers of DHBVN for availing concessional tariff were accepted. It may be observed that the increase in consumption during the night hours that have been registered on the system (over and above their normal consumption during corresponding month of previous year) has been very small. It was felt that the if the scheme is continued, more and more consumers would slowly become aware and realize the benefits of the scheme and would come forward for availing concessional tariff during night hours which would ultimately help the utilities to utilize their surplus power during night hours in an optimum manner.
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5. The Petitioner requested the commission vide Petition No. HERC/PRO/-31 of 2017 to extend the scheme for concessional tariff for HT Industrial Consumers for power drawn by them during off-peak hours in excess of their normal consumption up to 31.09.2017 with certain modification wherein it was proposed that for the power drawn during night hours (22:00 Hrs-04:00 Hrs) in excess of normal consumption, a concessional rate of Rs 5/- per unit ((Inclusive of FSA, ED and M.Tax) will be applicable to the HT consumers who have not availed open access during the month preceding the month of billing on concessional tariff and for HT consumers who availed open access during the month preceding the month of billing on concessional tariff, the applicable concessional rate would be Rs 6/- per unit ((Inclusive of FSA, ED and M.Tax). The applicable concessional tariff under the modified scheme was accordingly proposed as follow: a) For the HT Industrial Consumers who have not availed open Access during the month preceding the month of billing on concessional tariff, a concessional rate of Rs 5/- per unit (Inclusive of FSA, ED and M.Tax will be applicable on power drawn during night hours (22:00 hrs to 04:00 hrs) in excess of normal consumption.
b) For the HT Industrial Consumers who availed open Access during the month preceding the month of billing on concessional tariff, a Concessional rate of Rs 6/- per unit (Inclusive of FSA, ED and M.Tax) will be applicable on power drawn during night hours (22:00 Hrs to 04:00 Hrs) in excess of normal consumption.
The Commission, however, did not entertain the Petition and returned the same vide letter No. 221 Dated 05-05-2017 with the remarks that ‘…. it is directed to discontinue the night time concessional tariff, since the commission is actively considering to introduce Time of the Day (ToD) in the ensuing ARR order’.
6. The Petitioner has further submitted that the Commission in its ARR/Tariff Order dated 11.07.2017 for Distribution and Retail Supply Business of Discoms have introduced ToU tariff on optional basis. This option is available to HT Industrial Consumers including Arc Furnaces/Steel Rolling Mills, LT Industrial Consumers, Non domestic (HT), Bulk supply (excluding DS) consumers, Public water works and lift irrigation. The ToU tariff shall comprise of three ToU segments of the day, peak demand period (6:30 PM to 10:00 PM), off peak demand period (10 PM to 5:30 AM)
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and normal demand period (5:30 AM to 6:30 PM). The ToU tariff approved by the commission is as under:-
Period Charge Time Off-Peak Demand 15 % rebate on the normal energy charges From 10:00 P.M to 05.30 (October to March) as approved by the Commission. A.M Peak Demand 19% premium over the energy charges From 06.30 P.M to 10.00 (October to March) determined by the Commission P.M Normal Demand Normal Tariff From 05.30 A.M to 06.30 (October to March) P.M Demand Charges As determined by the Commission - shall be the same for all categories of consumers including ToU. PLEC shall continue to be applicable for Open Access Power.
The applicable energy rate for HT Industrial Consumers for off Peak Hours work out as per the ToU tariff approved by the Commission is as under:- Voltage Level Off Peak Hours Rate as per Corresponding Rate at 0.95 PF ToU Tariff Rs./kVAh Rs./ kWh 11 KV 5.65 5.95 33 KV 5.57 5.86 132 KV 5.48 5.77 220 KV 5.40 5.68 400 KV 5.31 5.59
7. The Petitioner has submitted that as per the information obtained from IEX, the average landed price at Haryana periphery for the power drawn open access consumers through power exchange during 22:00-05:30 hours, i.e. for off peak power, is around Rs 2.61/unit. The landed price at consumer end works out as under:-
Particular At 11/33KV At 66KV and above Rs/ kWh Rs/kWh Landed Price at Haryana Periphery 2.61 2.61
Intrastate Transmission charges 0.08 0.08 @2.5% Intrastate Transmission charges 0.36 0.36
Wheeling Charges 0.84 0.00 Cross Subsidy Surcharge 1.63 1.63 Additional Surcharge 0.99 0.99 Landed Price at consumer end 6.51 5.67 As may be seen, whereas for the consumer at the 11KV and 33KV, the ToU Tariff is lower than the per unit rate at which power is available to the consumer
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through open access from the power exchange but for the consumers at 66 KV and above, the ToU Tariff is higher than the per unit rate at which power is available to the consumers through open access from the Power Exchange during off peak hours except for at 400 KV level. So to wean away the HT Industrial Consumers at 66KV and above, who are drawing power through open access during night hours, back to Discom’s supply, a more competitive rate need to be offered.
8. The Petitioner has submitted that the ToU Tariff has been introduced w.e.f.11-07- 2017 only. It is yet to be seen how many consumers would come forward to opt the same and its impact i.e. how far would it help in flattening the load curve or in utilization of the surplus power, would be known only after a couple of months. It is, however, felt that ToU Tariff is mainly employed by the utilities as a tool for flattening of the load curve and may not be of much help as far as utilization of surplus power is concerned. The main objective of the Discom’s proposal to extend the scheme of concessional tariff for HT industrial consumers for the power drawn during night hours (22:00 Hrs to 04:00 Hrs) in excess of normal consumption was to incentivize those HT Industrial Consumers who are currently procuring power through open access, mainly from the Power Exchange, during night hours to shift back to Discom’s supply so that surplus power is used as far as possible. From the data given below in respect of monthly back down of surplus power during night hours for the period October-2015 to March-2016, it may be observed that the surplus power in the range of 1000 to 2200 MW (approx.) is available during night hours in the month of October-2015 to March- 2016 which has to be backed down because of low demand.
If the concessional tariff for HT Industrial Consumers for the supply during night hours, to be applicable on incremental consumption, is introduced from October to March and a competitive rate viz-a-viz the rate at which these consumers are able to procure power through open access, is offered, it would be possible to utilize a part of this surplus power. It is pertinent to mention here that the commission in its various ARR/Tariff Orders have been directing the Discoms from time to time to find ways and means for utilization of surplus power. The scheme of concessional tariff for HT Industrial Consumers for incremental consumption during night hours is a step in this direction.
Further it is felt that, despite introduction of ToU tariff, which is optional, the scheme of concessional tariff for HT Industrial Consumers for supply during night hours can also be implemented because, whereas ToU tariff would apply to normal consumption, the
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concessional tariff would apply only to incremental consumption during night hours over and above the normal consumption as discussed in Para 2. Hon’ble commission is, therefore, requested to reconsider the Discom’s proposal for extending supply to HT Industrial Consumers during night hours at a concessional rate for the power drawn in excess of normal consumption. The marginal capacity expected to be utilized during night Hours (which otherwise would have to be backed down) has been considered as 200-500 MW as earlier taken and variable cost of the marginal capacity has been worked out and the same varies on day to day basis from Rs 1.79 to Rs 3.70 per kWh.
9. In the proposal earlier made, the night hours for the purpose of concessional tariff were taken as 22:00 Hrs to 04:00 Hrs. The exiting Trivector Meters installed for HT Industrial consumers have the ToD register for the measuring the consumption from 22:00 Hrs to 05:30 Hrs and not for 22:00 Hrs to 04:00 Hrs. Accordingly, the base consumption as well as incremental consumption of each consumer had to be worked out from load survey data of his meter which was quit cumbersome and, besides, certain assumptions had to be made. It is, therefore, proposed that the night hours i.e. off peak hours for the purpose of concessional tariff may be taken as 22:00 Hrs to 05:30 Hrs instead of 22:00 Hrs to 04:00 Hrs as has been done in the ToU tariff.
Further it may be observed that landed cost per unit of power drawn through open access in case of HT Industrial consumers at 66KV and above voltage level is lower by 84 Paise per unit as compared to the landed cost per unit of power drawn through open access for the consumers on 11/33 KV voltage level as in case of the former, wheeling charges of 84paise per unit are not leviable. Further it may also be noted that the retail tariff approved by the commission for HT Industrial consumers is also lower at higher supply voltages. The Energy charges for the HT Industrial Consumers at 11KV are Rs 6.65/kVAh whereas at 33 KV, 66/132KV and 220KV, the Energy charges are Rs. 6.55, Rs. 6.45, and Rs. 6.35/kVAh respectively. Besides, the transmission/distribution losses to be borne by the distribution licensee are much lower in case of consumers at 66 KV and above. It is, therefore considered prudent that distinction is made between the concessional tariff offered to HT Industrial Consumers on 11/33 kV and that offered to HT Industrial Consumers at 66 kV and above. It is also observed that, out of around 500 HT Industrial Consumers who have been given NOCs for drawl of power through open access, only 32 Consumers came forward for the concessional tariff when it was implemented from January-March
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2017. The concessional tariff, therefore, need to be made more competitive and attractive.
10. In view of above, the Petitioner has requested to the Commission kindly considered and approve the scheme of concessional tariff for HT industrial consumer for power drawn by them during off peak hours i.e. 22:00 Hrs to 05:30 Hrs in excess of their normal consumption during the corresponding month in the preceding year as given below.
I. The HT Industrial consumer, desirous of availing concessional tariff as per the terms and conditions proposed by the Discoms, shall submit his application to the Chief Engineer / Commercial of respective Discom.
II. The committee headed by Chief Engineer / Commercial and comprising of Chief Financial Officer, Superintending Engineer HPPC/SO, Superintending Engineer/Metering & Protection and Sr. AO/HPPC, shall preferably, clear the application within the same day. However, the decision shall in no case be delayed beyond three days from the date of receipt of the application.
III. The concessional tariff, as given below, which shall be inclusive of FSA, ED and M.Tax, would be applicable for the energy drawn during off peak hours i.e. 22:00 Hrs. to 05:30 Hrs. over and above normal consumption in the corresponding month of the preceding year. The energy drawn over and above the normal consumption,
on which concessional tariff would apply, would be equal to lesser of ,
where
x= Cumulative change in consumption during night hours (22:00 Hrs to 05:30
Hrs) over the entire billing cycle.
y= Cumulative change in total consumption during the 00:00 Hrs to 24:00 Hrs
over the entire billing cycle. The base consumption for working out the change in consumption would be decided by the Nigam on case to case basis keeping in view the factors like seasonality, connected load/CD extension etc.
In case of a consumer who has also opted for ToU tariff also, the consumption during off peak hours in any month, on which ToU tariff would apply, would be worked out after
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reducing from the total consumption during off peak hours, the incremental consumption which qualifies for concessional tariff.
Concessional Tariff
A. HT Industrial Consumers who have not availed open access preceding the month of billing on concessional tariff a) HT Industrial Consumers on 11/33 kV Rs. 5.00/kVAh b) HT Industrial Consumers on 66 kV and above Rs. 4.75/kVAh
B. Industrial Consumers have availed open access preceding the month of billing on concessional tariff a) HT Industrial Consumers on 11/33 kV Rs. 5.50/kVAh b) HT Industrial Consumers on 66 kV and above Rs. 5.25/kVAh
Example: In case a consumer (say at 11 kV) has availed Open Access during any time in the month of April, then in case he opts for concessional tariff, He will be charged a rate of Rs 5.50 per kVAh in May on power drawn during night hours (22:00 Hrs to 05:30 Hrs) in excess of normal consumption.
However, subsequently if the same consumer does not avail Open Access in the month of May, he will be charged concessional tariff of Rs 5.00 per kVAh in the month of June on power drawn during night hours (22:00 Hrs to 05:30 Hrs) in excess of normal consumption and so on. C. Once opting to avail concessional tariff, the consumer would continue to be charged concessional tariff for at least three billing periods. The billing under concessional tariff shall commence from start of billing period immediately following the date of acceptance of the application of the consumer. D. The scheme of concessional tariff would remain operative from October, 2017 to March, 2018 and shall terminate on 31st March, 2018.
11. The petitioner has further submitted that the scheme for concessional tariff for HT Industrial Consumers as above for power drawn by them during off-peak hours in excess of their normal consumption during the corresponding billing period in the preceding year shall be subjected to following conditions.
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Commission’s Analysis & Order
The Commission has held public hearing in the case on 16.11.2017 and also along with the present ARR Petition on 11.09.2018. After hearing the parties on 16.11.2017, the Commission had vide its Order dated 22.11.2017, directed the petitioner to provide certain details. Further, the Commission had vide its memo no. 3543/HERC/Tariff dated 10.01.2018, had directed the Petitioner to file its reply on the comments received from Sh. R.K. Jain. The Petitioner has still not provided the requisite details/reply. Further, The Commission has observed that the discriminatory tariff proposed by UHBVNL is against the relevant provisions of the Electricity Act, 2003. Therefore, the Peitition No. HERC/PRO-65 of 2017 is disposed of as dismissed.
UHBVNL has filed Petition vide memo no. Ch.52/SE/RA/N/F-56/Vol-(15) dated 05.04.2018 requesting the Commission to extend rebate of maximum 15% on the normal energy charges to all categories of consumers in the Panipat, Smart City area of consumption of energy during off-peak hours (PRO-17 of 2018). UHBVNL has submitted as under:-
1. The Petitioner has submitted that the Ministry of Power has allocated 14 Smart Grid pilot projects that will be implemented by various state-owned distribution utilities in India. The first project had been established by UHBVN in Panipat City in collaboration with NEDO. The power corporation has selected the City Division of the Panipat circle of the UHBVN for the Smart Grid Project initially.
2. The Benefits of the Smart City Project in the Panipat city have been enlisted below: SCADA/OMS: Reduction in Outage Area, Frequency and Duration. SCADA/OMS: Monitoring Performance of Fault Rectification Team. System Strengthening: Quality Power and Fewer Breakdowns. AMI: Accurate Billing and Energy Self-Monitoring by Consumers.
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AMI: Tamper Information and Load Profile Analysis to detect theft and to formulate effective Time of Use tariff mechanism. AMI: Peak Load Management to avoid overloading at consumer end. 3. The Petitioner has further submitted that the current metering system of all the consumers falling in the Smart City Project is being updated with the Smart Meters which are having facilities for remote metering, Tamper notification, remote disconnection and reconnection and provision for Time of Day metering. As such, in order to promote consumers to be a part of smart metering project, a rebate needs to be offered to the consumers during the off-peak hours as an incentive for getting smart meters installed in the Panipat smart city project. 4. As per Section 62 of The Electricity Act, 2003, also provides for determination of tariff by Commission for a particular section of consumers based on the load factor and consumption etc.
“(3) The Appropriate Commission shall not, while determining the tariff under this Act, show undue preference to any consumer of electricity but may differentiate according to the consumer's load factor, power factor, voltage, total consumption of electricity during any specified period or the time at which the supply is required or the geographical position of any area, the nature of supply and the purpose for which the supply is required.” 5. The Petitioner has further submitted that in order to incentivize consumers to consume more energy during off peak hours and limit their electricity demand during peak hours, it is proposed that a rebate/premium which may be capped at 15% of applicable tariff may be given/charged to the domestic consumers covered in the Panipat Smart City Project. 6. The Rebate/Premium will be given in time slot approved by the Commission for Time of Day Tariff. However, the exact time slots in which rebate/premium will be given /charged will be communicated to the consumers, a week in advance, depending upon the demand supply scenario of power.
7. The petitioner has submitted that the rebate/premium may be given/ charged on pilot basis during the FY 2018-2019 and the financial impact would be submitted to the Commission at the end of the financial year.
Commission’s Analysis & Order
The Commission has examined the Petition filed by UHBVNL and has considered to grant the appropriate relief for the consumers with smart meters as
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Further, the Time of Use Tariff/Time of Day (ToD) scheme introduced by the Commission in its ARR Order dated 11.07.2017, shall continue till further Orders, except that the rebate for off-peak hours shall be @ 10%. The revised ToD tariff is tabulated as under:-
Period Charge Time Off-Peak Demand 10 % rebate on the normal energy charges as From 10:00 P.M to 05.30 A.M (October to March) approved by the Commission. * Peak Demand 19% premium over the energy charges From 06.30 P.M to 10.00 P.M (October to March) determined by the Commission Normal Demand Normal Tariff From 05.30 A.M to 06.30 P.M (October to March) Demand Charges As determined by the Commission - shall be the same for all categories of consumers including ToU. PLEC shall continue to be applicable for Open Access Power. * Note: The rebate of 10% shall be increased to 15% in case the consumer install Smart Meter/Smart Grid as per CEA norms. Further, if such consumer install rooftop solar system also then the rebate shall be increased to 20% and in case the rooftop solar system is accompanied by battery storage system, the rebate shall be increased to 25%. The consumers may be allowed to avail these benefits by giving an undertaking to comply with the terms and conditions mentioned herein above within seven months of the date of undertaking. In case any consumers fails to comply with the undertaking within the period of seven months, the benefits so availed shall have to be refunded immediately alongwith the interest of 17% per annum.
Further, the consumers having Smart Meter/Smart Grid as per CEA norms and Rooftop Solar system as per HAREDA norms, may apply for availing supply under Single Point Supply for consideration of the Commission.
The DISCOMs should make efforts to sell the surplus power to Industry in the State at ToD tariff and not sold through the power exchange. DISCOMs are directed to upload on their website on daily basis, the power purchase details (sources, rate, UI etc), overdrawl, underdrawl, power backed down summarised into energy available, energy scheduled, energy consumed and energy lost.
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Chapter 8
DIRECTIVES
The Commission has reviewed all the directives issued to the Discoms in its orders issued in the past and observes that some of the directions issued are yet to be implemented by the Discoms. The Commission reiterates that all the directives issued by it are to bring in operational efficiency and facilitate financial turn-around of the Discoms as well as enhance consumers’ satisfaction. On the issue of reigning the feeder line losses and replacement of dead / defective consumer meters, the Commission had given time bound targets and subjected non-compliance of the same to penal action as well. The Commission observes, as also pointed out by the stakeholders in the public hearings that the Discoms have not complied with the directives. Hence, the Commission gives 45 days time to the Distribution Licensees to submit status report bringing out the measures/efforts taken/made to meet the targets and detailed reason for non- compliance, if any.
1. DISCOMs should standardise their bill format as per FOR guidelines and should separately contain the amount of security deposit collected from customer. Unwarranted cells should be eliminated from the standardised format of bill. At the time of public hearing, it was objected that telephone number of the Commission has been given in the bills. It may be ensured that consumer complaint numbers given in the bill are correct. Complaint cell should be made robust.
2. DISCOMs shall survey and install (if feasible) E-Vehicle charging stations in parking space available at Panchkula, Faridabad, Panipat, Karnal and Gurugram.
3. The Commission has observed that incorrect bills are being issued to large number of consumers. In this regard, DISCOMs are directed to anlayse and terminate the contract of those billing agencies issuing faulty bills. Not more than two billing agencies should be hired.
4. As per public demand at the time of hearing, ACR performa of the Officers/Officials of the DISCOMs should contain details of defaulting consumers under their jurisdiction, pending connections, line losses exceeding 20% in the circle under their jurisdiction and resultant revenue loss. It may also effect the promotion of the concerned Officer/Official.
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HERC Order on Application for True Up for the FY 2016-17, APR for the FY 2017-18 and ARR and Tariff Determination for the FY 2018-19
5. DISCOMs are directed to pursue regarding installation of Single Point Connection including Smart Grid and Smart Meter as per CEA norms in Government Colonies/B&R/HUDA/Police/Irrigation colonies etc. and they may also explore the possibilities of installing Rooftop solar system.
6. The Discoms, in line with the HERC DSM Regulations, are directed to identify DSM programmes / plan and submit the same for consideration of the Commission.
7. The DISCOMs are directed to submit quarterly report of progress made under UDAY scheme.
All other directives contained in the various chapters of the present Order shall be complied with by the Discoms within the time line specified for the purpose and all sales circulars/commercial circulars be issued by both the Distribution Licensees uniformly and in consonance with each other.
The Tariff and charges for Distribution & Retail Supply of electricity in Haryana by the distribution licensees i.e. UHBVNL & DHBVNL as well as CSS and Additional Surcharge as determined in the present Order shall be applicable from 01.11.2018 and shall remain effective until these are revised / amended by the Commission.
This order is signed, dated and issued by the Haryana Electricity Regulatory Commission on 15.11.2018.
Date: 15.11. 2018 (Jagjeet Singh) Place: Panchkula Chairman
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